Back in 2015 Tony Robbins introduced the world to the “All weather fund” with his book Money – Master the game – Promising average near market returns with extremely low downsides, but does it work?
A brainchild of master investor Ray Dalio, the All weather fund is designed to do one thing, passively invest in low cost no-managed funds, returning 7.7% on average since it began.
Interestingly it’s gotten so popular that it’s actually over taking the previously much larger Alpha fund which nearly doubled the returns by chasing the big wins.
It did this by doing one thing well, mitigating loss. While people were running for the hills in the last down turn the average losses it suffered were less than 4%.
The breakdown is this.
30% in stocks
40% in Long-term Treasury Bonds
15% in Intermediate-Term Treasury Bonds
7.50% in Gold
7.50% in broad Commodity basket
A mix of volatility and inflation checked investments that can be set on autopilot that if left alone double every 6 years or so. Last year it was up to 14% at one point.
Of course simple terms is fine but actionable choices are better so the mix is as follows.
VTI – Vanguard Total Stock Market ETF – 125.28
TLT – 20 year Treasury Bonds ETF – 126.46
IEF – 7-10 year Treasury Bond ETF – 107.26
GLD – SPDR Gold Trust 118.88
DBC – Power Shares DB Commodity Index Tracking Fund – 14.10
So there you have it, trade like a pro with 150 billion under managment.