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Summary

The All-Weather Portfolio (AWP) has lagged the S&P 500 since 2018, driven by secular shifts in monetary order and bond return prospects.

Changing monetary order and record-low real yields undermine AWP’s historical advantage and challenge its risk-parity foundation.

Elevated geopolitical risks and inflation favor increasing gold allocation — potentially up to 15% — while trimming bond exposure.

These changes morph the AWP to a barbell approach to isolate risks with a mix of ultra-safe assets (gold, cash) and high-growth equities.

This idea was discussed in more depth with members of my private investing community, Envision Early Retirement. Learn More »

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For decades, the All-Weather Portfolio (AWP) pioneered by Bridgewater founder Ray Dalio has helped investors – this author being one of them – to navigate the changing macroeconomic conditions effectively.…