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The All-Weather Portfolio: The Good, The Bad, And The Ugly


  • Q4 was another strong quarter for the All-Weather Portfolio, while full-year 2021 returns eclipsed 50%.
  • You might be surprised what the secret sauce has been, but I plan to implement this strategy until it stops working.
  • Not everything worked well, and I made some crucial takeaways in the fourth quarter.
  • I plan to keep the outperformance going in the new year with these top picks.
  • This idea was discussed in more depth with members of my private investing community, The Financial Prophet. Learn More »

Pie-chart on paper graphs

Henrik5000/iStock via Getty Images

Q4 2021 was another productive quarter for the All-Weather Portfolio ("AWP"). The diversified AWP returned 13.3% in Q4 beating most major stock market averages by a healthy margin. For reference, the DJIA appreciated by about 7%, the Nasdaq composite by

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This article was written by

Victor Dergunov profile picture

Victor Dergunov is an independent investor and author with 20 years experience. He preaches diversification and shares investment ideas across all market sectors. Victor aims to help readers build portfolios that perform well in all economic conditions.

He runs the investing group The Financial Prophet where he covers all market sectors and shares strategies for well-diversified investing. Features include: the All-Weather portfolio, trade alerts, technical analysis, daily reports with his latest updates, covered call strategies, and direct access in chat. Learn more.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of ASSETS MENTIONED either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (39)

Hi Victor. Iclk is doing a bad end!!! It lost 95%! What do you think about it?
All-weather in till the storm comes?
Victor Dergunov profile picture
@Big Louie Have weathered many, and will weather more
100% in Gold.

I have 200 ounces of Gold and want to reach 500 at these prices.

Why isn't everyone buying using paper money is beyond me.
22thoroughbred profile picture
@gold_seeker I said the same thing in 2010 same with silver, it's been dead money that long. From $1400-$1800 in 11 years while the S&P is up how much??
@22thoroughbred Well you have to be diversified. Gold and Silver are hard assets and have been a store of value for 1000's years and to discount them is a mistake, in my opinion, no matter how bad they perform in relation to the SPY.
22thoroughbred profile picture
@gold_seeker what you say is very true until it's not. I actually agree with you and had a considerable amount of physical from 2009-14 when it went from $1087-$1060 yet there are those like yourself that just will not see the facts. Sure inflation has been nothing short of insanely low and had the Fed let the dollar do what it's done for the last ~20 years you may have done very well, but you can't fight the fed. If gold doesn't hit $2200-$2500 by year end 23' it's perception as a holder of wealth vs the dollar will be unfortunate, good luck
TDune75 profile picture
~40% of this portfolio is in “hard” assets; gold, silver, metals, energy & industrials. Nothing in the travel, entertainment & leisure space. Another ~20% in crypto. VERY interesting! Certainly not your typical CFA approach.
stoney500 profile picture
Victor…No bonds or REIT’s in AWP?
Victor Dergunov profile picture
@stoney500 No, with respect, those are assets for my grandfather’s portfolio 😀
22thoroughbred profile picture
@Victor Dergunov gotta disagree when it comes to REITS, nothing wrong with a 6-8% dividend and 20%+ cap appreciation, with rates rising that changes entirely but that's what actively managing your portfolio is all about
CAGR looks good. I wonder how big the drawdown of this portfolio was so far.
AAA Investments - PayONLY4Performance profile picture

…and crickets.

Fair question…and for anyone discussing portfolio, much less posting, an answer would be beneficial to all considering.

After all, it’s 100% about risk vs. reward (not just about the carrot).
My guess is that an all weather portfolio is designed to hedge different economic scenarios and to protect us from our own emotions. They are also designed to have a simple allocation and to be rebalanced annually. Consider Marc Faber's all weather strategy :

1. 25 percent in Total World Stocks
2. 25 percent in Ten Year Treasury Bonds
3. 25 percent in REITs
4. 25 percent in Gold and one could of course include Bitcoin
22thoroughbred profile picture
Any thoughts or insights on SLI?

Dale Roberts profile picture
It does not look like an all-weather portfolio. What do you hold for recessions and deflation?

Perhaps you hold a growth portfolio that is ready for inflation?

Victor Dergunov profile picture
@Dale Roberts The AWP gets adjusted to fit the changing market conditions. Right now, it is ready for inflation, but when the threat of deflation increases notably, the AWP will be positioned accordingly.
Dale Roberts profile picture
@Victor Dergunov all weather with active asset allocation, gotcha. That's interesting and something I think about.

That said there is that expression that we can't fix a ship in a hurricane.

Stuff can happen fast. Even with inflation (recent) we saw that the largest gains in commodities came early, before real inflation arrived.

But perhaps the theory is that we can show up late, for changes in economic regimes?

Dale Roberts profile picture
@Victor Dergunov still interested to hear your thoughts on this.

I'd suggest you do not hold an all-weather portfolio. You are practicing very active asset allocation.

That is quite different IMHO.

Et20 profile picture
Here is my current portfolio allocation.
I rebalance frequently

Pharma 25%
Industrial 15%
Semiconductor 12%
Software 10%
REIT 10%
Energy/Mining 10%
Banking 8%
Infrastructure 5%
Consumable 5%

US 70%
EU/UK 20%
JP 8%
AU/LATAM/TW/Russia 2%
China 0%
Victor Dergunov profile picture
@Et20 Looks great, why no China? 😀
Et20 profile picture
@Victor Dergunov

No rule of law and book keeping issues
22thoroughbred profile picture
One can be too diversified as well unless this portfolio is valued at $1.5mm+ there are too many names/sectors to manager efficiently
Lukoil looks quite interesting. I know nothing about Russian stocks. I would assume that the dividends are taxed just like a Canadian stock. Are they issued via 1099 or K-1? I might be up for a little Russian Roulette in my brokerage account. I would appreciate any info.
Slade_01 profile picture
@G-man$$ 1099. It's a bit different from Canada as it also is taxed on money in retirement accounts, while Canada has a tax treaty that eliminates that. IMO Lukoil is not a great buy for expectation of a rise in the price of oil, as the Russian government gets most of the increase and provides subsidies when oil is low. Lukoil pays a pretty flat dividend rate. For outside the US, I would look to SU, CNQ, ENB, or another Canadian if it is in a retirement account.
@911Slade Thanks for the reply. I don't invest in anything on that continent so I had no clue. I appreciate your taking the time to answer my questions.
Craig69 profile picture
Good Job Victor.
Our 7 stock portfolio didn't do too bad either😊

Rate of Return*** (1-Year)
AS OF 12/31/2021
Victor Dergunov profile picture
@Craig69 It sounds like you made some great stock picks. Care to share?
Craig69 profile picture
@Victor Dergunov

AAA Investments - PayONLY4Performance profile picture


…and the seven stocks are rotated on what frequency, annually??
Intel will continue ranging between $35-$60 while AMD and Nvidia making new ATHs.
Palantir will be a dead cat bouncing. It will most likely never recover as its management has lost the investor’s trust.
Lucid is already overvalued with no product and no proof of sustainability of its business. Tesla will continue its, though hyped, upward momentum while other powerful rivals such as NIO expanding their production of “high quality” EVs.
Victor Dergunov profile picture
@CaptainReza Palantir can regain investor confidence if they control their SBC. Great growth is ahead for the company.
When you say KL, is there a discount to just getting AEM shares? Aren’t KL shares being converted to AEM soon when the merger is finished?
So the only gains came from bitcoin related positions, is that correct? Looks like the other sectors together produced a loss?

Victor Dergunov profile picture
@drftr No, that’s not right. Excluding gold/silver related equities we saw about a 7.3% return in Q4 once options premiums got factored in.
@Victor Dergunov Can you be please more specific? What was annual return excluding crypto?
Personally I avoid cryptos altogether.
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