All Weather Portfolio - Ray Dalio during slow growth/ downturn? How to balance bonds in low yield w/ rising rates?

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hornet1
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Joined: Sun Oct 21, 2018 11:01 am

All Weather Portfolio - Ray Dalio during slow growth/ downturn? How to balance bonds in low yield w/ rising rates?

Post by hornet1 » Thu Dec 06, 2018 10:37 am

So tony robbins/ ray Dalio heavy on bonds and some gold with only 30% in equities

Will this do well in the next downturn where we just had an 'inverse yield curve' and long-term bond yields are super 'low'?

If the market tanks soon (6 months to 2 years) then where will 'safe havens' be?

Precious metals? Commodities etc?

What are some of your portfolio balances?


Supposedly Dalio says for 'falling' markets you should have Treasury Bonds and TIPS, but I don't have much in them. I also read that longer-term bonds like the ones in Vanguards BND will go down because of the 'inverse yield curve' and short-term bond rates going up while long-term bonds are lower.

Ray dalio has 40% in Long term bonds, but does that make sense right now when the long term bond yields are so low?

In 2008 crash he had long term bonds that did well probably because they had previous high rates like 5-8% probably??



What are your thoughts for the current environment where in?

https://www.tonyrobbins.com/wealth-lif ... l-market/
https://www.tonyrobbins.com/wealth-life ... ll-market/



---


Right now i'm in all index funds:
  • 40% US/ S&P etc (VTI vanguard indexes0
    10% gold/silver (GLD, SIL)
    20% foreign (vanguard ex US and some BLDRs index funds/ FXI)
    10% bonds (BND vanguard)
I'm in my mid 30s.
All are in a Roth IRA
I also have a large amount that trumps all my stocks/bonds in real estate, small apartments and rentals.

JBTX
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Joined: Wed Jul 26, 2017 12:46 pm

Re: All Weather Portfolio - Ray Dalio during slow growth/ downturn? How to balance bonds in low yield w/ rising rates?

Post by JBTX » Thu Dec 06, 2018 4:26 pm

I suspect the answer your going to get is mostly "I don't know what is going to happen next" and "I don't really plan to do anything different". That is what I will tell you.

I have a lot of respect for Dalio but I don't follow his investing advice. I could care less what Tony Robbins advocates as far as investing.

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galeno
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Re: All Weather Portfolio - Ray Dalio during slow growth/ downturn? How to balance bonds in low yield w/ rising rates?

Post by galeno » Thu Dec 06, 2018 8:53 pm

Where is the other 20%? It should be in bonds (BND).

Gold/silver is unnecessary as an inflation hedge. Especially if you own RE. Put the gold into foreign equities for 30%.


40% US/ S&P etc (VTI vanguard indexes0
10% gold/silver (GLD, SIL)
20% foreign (vanguard ex US and some BLDRs index funds/ FXI)
10% bonds (BND vanguard)
AA = 40/55/5. Expected CAGR = 3.8%. GSD (5y) = 6.2%. USD inflation (10 y) = 1.8%. AWR = 4.0%. TER = 0.4%. Port Yield = 2.82%. Term = 33 yr. FI Duration = 6.0 yr. Portfolio survival probability = 95%.

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nedsaid
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Re: All Weather Portfolio - Ray Dalio during slow growth/ downturn? How to balance bonds in low yield w/ rising rates?

Post by nedsaid » Thu Dec 06, 2018 9:17 pm

The problem is that in real life, the Ray Dalio All-Weather portfolio is dynamic. He makes adjustments to the asset allocation of his hedge fund. The Tony Robbins/Ray Dalio portfolio is static. It was something that Dalio came up with that he believed most small investors could implement. So the static portfolio is not going to perform like the real-life dynamic portfolio. Plus, the Tony Robbins book came out a few years ago (2014?) and some things have changed. Would Dalio recommend the same allocation today?
A fool and his money are good for business.

retiredflyboy
Posts: 23
Joined: Sun Dec 02, 2018 10:02 pm

Re: All Weather Portfolio - Ray Dalio during slow growth/ downturn? How to balance bonds in low yield w/ rising rates?

Post by retiredflyboy » Thu Dec 06, 2018 9:22 pm

At your age stay loaded up on stock index funds and forget what these so called experts say. If they were so smart they would not make money telling others how to make money, they would just make it themselves. Fully utilized tax advantages plans, pay yourself first, live below your means, keep increasing your income, keep expenses low and take the returns the market gives you. The great thing you have going for you is the power of compounding your returns over many years. Keep it simple and stay the course. Over many years you will be hard pressed to do better then the stock market return. You want to eliminate underperformance. The biggest threat to underperforming is listening to experts, fees and trying to outsmart the market.
Last edited by retiredflyboy on Thu Dec 06, 2018 9:30 pm, edited 2 times in total.
Facts are stubborn things. Everything works until it doesn’t.

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galeno
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Re: All Weather Portfolio - Ray Dalio during slow growth/ downturn? How to balance bonds in low yield w/ rising rates?

Post by galeno » Thu Dec 06, 2018 9:22 pm

70% VT + 30% BND would be the best port for you.
AA = 40/55/5. Expected CAGR = 3.8%. GSD (5y) = 6.2%. USD inflation (10 y) = 1.8%. AWR = 4.0%. TER = 0.4%. Port Yield = 2.82%. Term = 33 yr. FI Duration = 6.0 yr. Portfolio survival probability = 95%.

andrew99999
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Re: All Weather Portfolio - Ray Dalio during slow growth/ downturn? How to balance bonds in low yield w/ rising rates?

Post by andrew99999 » Thu Dec 06, 2018 10:36 pm

JBTX wrote:
Thu Dec 06, 2018 4:26 pm
I could care less what Tony Robbins advocates as far as investing.
Yea really. If Kevin Spacey went to learn about investing and wrote a book on it, what does his celebrity status in an entirely different field have to do with giving creditability to finance writing. It's idiotic. And the idiocy can be seen in the fact that Robbins took a portfolio that increased risk-free assets by increasing the risk/return back up with leveraging up the equities, and then he removed the entire reason why it allowed a higher proportion of risk-free assets (the leveraging) and somehow thinks it still makes some kind of sense :confused

goblue100
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Re: All Weather Portfolio - Ray Dalio during slow growth/ downturn? How to balance bonds in low yield w/ rising rates?

Post by goblue100 » Thu Dec 06, 2018 10:56 pm

galeno wrote:
Thu Dec 06, 2018 9:22 pm
70% VT + 30% BND would be the best port for you.
That is a very definitive statement. Here are 150 better portfolios:
https://www.whitecoatinvestor.com/150-p ... han-yours/
Personally, I like:
40% VTI
10% SPY
15% EFA
15% EFV
20% BND

For a 30 year old investor.
Financial planners are savers. They want us to be 95 percent confident we can finance a 30-year retirement even though there is an 82 percent probability of being dead by then. - Scott Burns

Angst
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Re: All Weather Portfolio - Ray Dalio during slow growth/ downturn? How to balance bonds in low yield w/ rising rates?

Post by Angst » Thu Dec 06, 2018 11:17 pm

hornet1 wrote:
Thu Dec 06, 2018 10:37 am
[Snip...]

Supposedly Dalio says for 'falling' markets you should have Treasury Bonds and TIPS, but I don't have much in them. I also read that longer-term bonds like the ones in Vanguards BND will go down because of the 'inverse yield curve' and short-term bond rates going up while long-term bonds are lower.

Ray dalio has 40% in Long term bonds, but does that make sense right now when the long term bond yields are so low?

In 2008 crash he had long term bonds that did well probably because they had previous high rates like 5-8% probably??

[Snip...]
IF... if the yield curve inverts, and IF that means not only do short rates rise but long rates fall, then those long bonds you'd already own b/c you followed Ray Dalio's advice, would go UP in value.

Yield and Price have an inverse relationship. When you said above "long-term bonds are lower", you need to be clear about what you're talking about. If LT Rates drop, the value of LT bonds you already own goes up.

I'm not advocating anyone's strategy whatsoever, just trying to clarify for you this relationship. I haven't hardly a clue where rates are going right now. Seems like they fell a bit the last couple of days though. Treasury bonds in general are good to own in an equity crash. Intermediate Term is a reasonable compromise for anyone who's not particularly confident about which rates are going which direction. I'm certainly not.

AlphaLess
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Location: Kentucky

Re: All Weather Portfolio - Ray Dalio during slow growth/ downturn? How to balance bonds in low yield w/ rising rates?

Post by AlphaLess » Fri Dec 07, 2018 12:14 am

goblue100 wrote:
Thu Dec 06, 2018 10:56 pm
70% VT + 30% BND would be the best port for you.
That is a very definitive statement. Here are 150 better portfolios:
https://www.whitecoatinvestor.com/150-p ... han-yours/
[/quote]

The bottom of that list looks downright ugly.

When you start having 20+ funds, with 1.3% allocations, that's when I want to vomit.
"You can get more with a kind word and a gun than with just a kind word." George Washington

dewey
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Re: All Weather Portfolio - Ray Dalio during slow growth/ downturn? How to balance bonds in low yield w/ rising rates?

Post by dewey » Fri Dec 07, 2018 12:53 am

Tony Robbins?????
“The only freedom that is of enduring importance is freedom of intelligence…”

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galeno
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Re: All Weather Portfolio - Ray Dalio during slow growth/ downturn? How to balance bonds in low yield w/ rising rates?

Post by galeno » Fri Dec 07, 2018 12:11 pm

I disagree. Every single one of those 150 ports are UNNECESSARILY complicated. 70% VT + 30% BND does everything the 150 ports do WITHOUT duplication or tilting.

The minimum position we will take with our port is 5%. And I have a hard time justifying THAT. 10% is more like it. The smallest position we have is 15% which is in a TIPS ETF.

Simplicity is bliss. Stay the course.
AlphaLess wrote:
Fri Dec 07, 2018 12:14 am
goblue100 wrote:
Thu Dec 06, 2018 10:56 pm
70% VT + 30% BND would be the best port for you.
That is a very definitive statement. Here are 150 better portfolios:
https://www.whitecoatinvestor.com/150-p ... han-yours/
The bottom of that list looks downright ugly.

When you start having 20+ funds, with 1.3% allocations, that's when I want to vomit.
[/quote]
AA = 40/55/5. Expected CAGR = 3.8%. GSD (5y) = 6.2%. USD inflation (10 y) = 1.8%. AWR = 4.0%. TER = 0.4%. Port Yield = 2.82%. Term = 33 yr. FI Duration = 6.0 yr. Portfolio survival probability = 95%.

AlphaLess
Posts: 1051
Joined: Fri Sep 29, 2017 11:38 pm
Location: Kentucky

Re: All Weather Portfolio - Ray Dalio during slow growth/ downturn? How to balance bonds in low yield w/ rising rates?

Post by AlphaLess » Fri Dec 07, 2018 8:50 pm

galeno wrote:
Fri Dec 07, 2018 12:11 pm
I disagree. Every single one of those 150 ports are UNNECESSARILY complicated. 70% VT + 30% BND does everything the 150 ports do WITHOUT duplication or tilting.
Not a bad thought.
Not a bad thought AT ALL.
"You can get more with a kind word and a gun than with just a kind word." George Washington

rgs92
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Joined: Mon Mar 02, 2009 8:00 pm

Re: All Weather Portfolio - Ray Dalio during slow growth/ downturn? How to balance bonds in low yield w/ rising rates?

Post by rgs92 » Fri Dec 07, 2018 8:59 pm

I think many like the idea of an All Weather Portfolio because they think it's one that never slumps much.
But you just can't have your cake and eat it too in investing.

All decent portfolios will fluctuate a lot.
Something that just goes up will never go up much in the long run. You can't have it both ways.
Last edited by rgs92 on Sat Dec 08, 2018 2:07 am, edited 1 time in total.

WanderingDoc
Posts: 1271
Joined: Sat Aug 05, 2017 8:21 pm

Re: All Weather Portfolio - Ray Dalio during slow growth/ downturn? How to balance bonds in low yield w/ rising rates?

Post by WanderingDoc » Sat Dec 08, 2018 1:06 am

hornet1 wrote:
Thu Dec 06, 2018 10:37 am
So tony robbins/ ray Dalio heavy on bonds and some gold with only 30% in equities

Will this do well in the next downturn where we just had an 'inverse yield curve' and long-term bond yields are super 'low'?

If the market tanks soon (6 months to 2 years) then where will 'safe havens' be?

Precious metals? Commodities etc?

What are some of your portfolio balances?


Supposedly Dalio says for 'falling' markets you should have Treasury Bonds and TIPS, but I don't have much in them. I also read that longer-term bonds like the ones in Vanguards BND will go down because of the 'inverse yield curve' and short-term bond rates going up while long-term bonds are lower.

Ray dalio has 40% in Long term bonds, but does that make sense right now when the long term bond yields are so low?

In 2008 crash he had long term bonds that did well probably because they had previous high rates like 5-8% probably??



What are your thoughts for the current environment where in?

https://www.tonyrobbins.com/wealth-lif ... l-market/
https://www.tonyrobbins.com/wealth-life ... ll-market/



---


Right now i'm in all index funds:
  • 40% US/ S&P etc (VTI vanguard indexes0
    10% gold/silver (GLD, SIL)
    20% foreign (vanguard ex US and some BLDRs index funds/ FXI)
    10% bonds (BND vanguard)
I'm in my mid 30s.
All are in a Roth IRA
I also have a large amount that trumps all my stocks/bonds in real estate, small apartments and rentals.
You need a real asset which will pay a 8-15% cash flow regardless of valuation. You have the right idea :)
I'm not looking to get rich quick (stocks), I'm not looking to get rich slow (indexing), I'm looking to get rich, for sure (real estate) | Don't wait to buy real estate. Buy real estate.. and wait.

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