Bridgewater's All Weather Mechanics

Ray Dalio's Risk Parity framework designed to survive any economic environment by balancing risk rather than capital.

The Institutional Edge

The All Weather portfolio recognizes that all asset classes are simply pricing in two things: Growth and Inflation. By allocating risk equally across assets that perform well in rising/falling growth and rising/falling inflation, the portfolio becomes largely immune to economic surprises.

Implementation for Retail

Instead of a 60/40 capital split, Risk Parity often looks like 30% stocks, 55% bonds (leveraged), and 15% commodities/gold. Retail investors can approximate this using long-duration Treasuries (TLT), Gold (GLD), and broad equities (VTI), occasionally using mild leverage to balance the lower volatility of bonds.