Strategy - All Weather Portfolio (American)
A diversified, low maintenance portfolio that consists of asset classes that take advantage of different economic 'seasons'. It differs from the Permanent Portfolio by adjusting each asset's allocation based on risk, while the Permanent Portfolio equally allocates each asset. Ensures that there are asset classes that take advantage of different economic seasons: equities for high economic growth, bonds for low economic growth (and to counter the volatility of stocks), and commodities and gold for inflation.
Past PerformanceRelatively low performance during bull markets (2002-2007, 2009-present), but large bond allocation resulted in protection during bear markets (2000-2001, 2008).
Based on the model portfolio described in MONEY Master the Game: 7 Simple Steps to Financial Freedom by Tony Robbins, which is a simplified version of a strategy created by Ray Dalio.
Transaction costs are minimized as rebalancing only occurs once a year.
|American 20+ Year Treasuries||TLT||40.0 %|
|Intermediate Bonds||IEF||15.0 %|
|S&P 500||SPY||30.0 %|
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The information below shows how well this strategy performed in the past so that you can determine if it would be a good fit for you. The strategy backtest results are shown compared against the "Couch Potato - Balanced" benchmark strategy.