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Hey Sam, where are you located? I live in Eindhoven. I am just getting started into the world of finance and learning whatever and whenever possible. As the lockdown has been extended I think we'll probably getting out if it end March, before the elections. Hopefully we can then grab a drink.

The premise of the All Weather Portfolio is two folds:

1. Owning assets that are non correlated over time.
2. Owning assets that do well in certain economic conditions.

Ray Dalio looks at three variables. Risk or volatility, rate of inflation and rate of economic growth. When it comes to volatility, the portfolio is designed to be risk neutral or volatile neutral. In other words he is over weight bonds because they are the least volatile. Whereas commodities are at 7.5% percent allocation because they are super volatile therefore cancelling out the volatility.

When it comes to the rate of inflation and rate of economic growth he has assets that will react differently based on the conditions of inflation and growth. So for example if you have rate of inflation slowing down and economic growth slowing down you would expect the bonds to do well and the stock not to do well.

The assets are non correlated because some assets will do well during certain economic conditions and certain assets will not do well and hence the non correlation.

So if anyone wants to design a portfolio that performs over the long term, you need to have assets that are non correlated, you need to take care of volatility, and you need to also consider the rate of inflation and the rate of growth.

Chris Cole of Artemis Capital has a very interesting portfolio based on the All Weather principles and takes it to another level in my opinion but difficult to... (More)