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The Best Portfolio for Investing | Ray Dalio’s All-Weather Portfolio

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Ray Dalio All-Weather Portfolio

Learn how to protect your money in any financial climate.

Investing is a risky thing to do in any financial climate, but it also provides a great opportunity to create long-term wealth that you can use to live out your purpose.

Ray Dalio is someone who I call a “legendary investor”. To me, that term represents an icon who has used investing and other financial assets to create wealth for themselves, their communities, and generations to come. He runs Bridgewater Associates and manages over $160 billion of investments and is a great teacher of how to use your money, so when he talks, I listen.

A few years ago, he revealed to Tony Robbins what he calls his “All-Weather Portfolio” which is designed to protect you and your money in any economic situation you might face.

The three most common types of these market trends are:

Bull markets – a market that is very positive, share prices rise, and encourages investors to buy.

Bear markets – a market that is very negative, share prices drop, and encourages investors to sell.

Recession – a period consisting of at least two successive financial quarters of negative GDP.

To find an investment portfolio that is able to give you solid gains in bull markets, and minimize significant losses in bear markets and recessions is something that must be crafted beautifully, so what are the different components?

To create your own all-weather portfolio, the breakdown is well-diversified in the following categories:

Dalio All-Weather Portfolio Table

1. Long-Term Bonds – 40% consists of long-term bonds. Typically less volatile which counteracts the volatility of stocks.

2. Stocks – 30% consists of individual stocks. They can be very lucrative, but also be very volatile depending on the economic trends, recent news, etc.

3. Intermediate-Term Bonds – 15% consists of intermediate-term bonds. Typically less volatile which counteracts the volatility of stocks.

4. Gold – 7.5% consists of gold. A great way to diversify away from the markets.

5. Commodities – 7.5% of raw materials and products such as food, metal, earth products, etc.

Learn more about this portfolio by watching our video here.

Now that you know and understand the breakdown of Ray Dalio’s All-Weather Portfolio, it is time to do your own research and identify where and what parties you want to align your money with. Make sure to consult a professional financial advisor before doing anything with your money.

 

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