Ray Dalio's all weather portfolio

Thrugelmir

quirkydeptless said:

Reposting this link which someone posted earlier where the Portfolio is reviewed from the perspective of a UK investor.

https://www.youtube.com/watch?v=5T-rc90MGBE

I wouldn't want to use the FTSE 100 though.

I set up a virtual portfolio based on this to view it for my own interest with

40%    GLTL     SSGA SPDR ETFS Europe I plc Barclays Cap 15+yr Gilt
30%    VWRL     Vanguard Funds plc FTSE All-World UCITS ETF
15%    VGOV    Vanguard Funds plc UK Gilt UCITS ETF GBP
7.5%    SGLN    iShares Physical Metals plc Physical Gold ETC
7.5%    CMOP     Invesco Markets plc Bloomberg Commodity UCITS ETF A GBP

Other investments are available

Try the FTSE Mid Cap index instead , around 48% of revenues are generated overseas. Not as domestically focussed as many erroneously assume. 

Malthusian

sixpence. said:

@Malthusian can you please explain what you mean by forex trade? I have this suspicion that UK bonds aren’t as diversified as US ones because the US represents such a large part of the market.

If a GBP investor invests in a USD Treasury, the return they will get depends mostly on the movement between GBP and USD. The yield from the bond (next to nothing) is likely to be neither here nor there.

Therefore it is a forex bet, not a fixed income investment.

The portfolio under discussion recommends investing solely in US Treasuries (at least that's how "US Bonds" was interpreted on the websites covering it I looked at) so it's got nothing to do with diversification. Gilts are exactly as diversified as US Treasuries, i.e. not at all - they're loans issued by a single national government.

quirkydeptless

sixpence. said:

Did you use anything special to pick the bond ETFs you chose? What made you decide on them?

No particular reason for the choice, I just went for ones listed in the video (except for the equity) which I had already used in other virtual portfolios, i.e. not that I thought that they were any better than other sugggestions.

AnotherJoe

sixpence. said:

Ray Dalio invented this portfolio called the all weather portfolio. It basically spreads risk via asset allocation by choosing asset classes which negatively correlate with each other. Seen a couple of interviews with him and he seems very gifted and like he genuinely cares about people. What do folk on here think Ray's all weather portfolio? 

I think its a shocker. I would be struggling financially if i had a portfolio like that especially the say last 10 years. Or from when i started investing, doesnt even bear thinking about I'd still be working.

Thrugelmir

AnotherJoe said:

sixpence. said:

Ray Dalio invented this portfolio called the all weather portfolio. It basically spreads risk via asset allocation by choosing asset classes which negatively correlate with each other. Seen a couple of interviews with him and he seems very gifted and like he genuinely cares about people. What do folk on here think Ray's all weather portfolio? 

I think its a shocker. I would be struggling financially if i had a portfolio like that especially the say last 10 years. Or from when i started investing, doesnt even bear thinking about I'd still be working.

Thought it was for those seeking capital preservation. Not as a "guide" portfolio. 

AnotherJoe

Thrugelmir said:

AnotherJoe said:

sixpence. said:

Ray Dalio invented this portfolio called the all weather portfolio. It basically spreads risk via asset allocation by choosing asset classes which negatively correlate with each other. Seen a couple of interviews with him and he seems very gifted and like he genuinely cares about people. What do folk on here think Ray's all weather portfolio? 

I think its a shocker. I would be struggling financially if i had a portfolio like that especially the say last 10 years. Or from when i started investing, doesn't even bear thinking about I'd still be working.

Thought it was for those seeking capital preservation. Not as a "guide" portfolio. 

Fair enough I was unaware of that.

ColdIron

If this sort of portfolio appeals you might look at Troy Trojan as it's not terribly dissimilar. More equities, less bonds (US index linkers rather than US long dated bonds) and gold replaces the generalised commodities which seems to address some of the shortcomings already mentioned. Food for thought if you want WP all packaged up

aroominyork

sixpence. said:

What do people think of hedged vs unhedged with regards to GBP currency risk? 

There are two questions there. 1). Do 'we people' think Sterling will go up or go down? Answer: no one knows, so who cares what us few think. 2) Should you hedge to take out the currency risk? Answer: people are generally against hedging equities, although I see merit in hedging part of them so that your returns better reflect the underlying investments. For bond funds I always want to hedge (although my strategic sterling bond funds can leave 30% unhedged). 

sixpence.

Thrugelmir said:

AnotherJoe said:

sixpence. said:

Ray Dalio invented this portfolio called the all weather portfolio. It basically spreads risk via asset allocation by choosing asset classes which negatively correlate with each other. Seen a couple of interviews with him and he seems very gifted and like he genuinely cares about people. What do folk on here think Ray's all weather portfolio? 

I think its a shocker. I would be struggling financially if i had a portfolio like that especially the say last 10 years. Or from when i started investing, doesnt even bear thinking about I'd still be working.

Thought it was for those seeking capital preservation. Not as a "guide" portfolio. 

It's for growth and preservation, in all economic conditions. 

sixpence.

aroominyork said:

sixpence. said:

What do people think of hedged vs unhedged with regards to GBP currency risk? 

There are two questions there. 1). Do 'we people' think Sterling will go up or go down? Answer: no one knows, so who cares what us few think. 2) Should you hedge to take out the currency risk? Answer: people are generally against hedging equities, although I see merit in hedging part of them so that your returns better reflect the underlying investments. For bond funds I always want to hedge (although my strategic sterling bond funds can leave 30% unhedged). 

To hedge or not to hedge? That is the question