Ignore Market Forecasts And Adopt An All-Weather Portfolio

Jul. 08, 2022 4:57 PM ETBND, EEM, GLD, GSG, IEI, TIP, TLT, VEA, VNQ, VTI, VV34 Comments
Ralph Wakerly profile picture
Ralph Wakerly
1.34K Followers

Summary

  • Many experts tell us the market’s direction and which assets are best to ride out market storms.
  • But the data show market timing is destructive to your wealth and the pros struggle to pick the best asset classes.
  • Two example index-based, all-weather portfolios demonstrate a proven formula to ride out rough markets and achieve solid long-term performance.
  • Why adopt an all-weather portfolio right now.
  • A more nuanced approach is possible.

Weather Thunderstorm Climate Change

solarseven

Introduction

The current market turmoil has fueled many different expert opinions about what investors should do. Jeremy Grantham and Jim Rogers expect one of the worst bear markets ever. Some say to buy stocks - the market is bottoming. Technical analysts and market

Missing the Market's Best Days Can Be Costly

Fidelity

Asset class positive performance tendencies

Author

Favorable asset classes by scenario

Author

Periodic table of asset class performance

BlackRock Investment Institute, data from Refinitiv, June 2022

Ray Dalio All-Weather Portfolio

lazyportfolioetf.com

Marc Faber Portfolio

lazyportfolioetf.com

All Weather Portfolio performance and the 60-40

Author, lazyportfolioetf.com

Ray Dalio Portfolio Rolling Returns

lazyportfolioetf.com

Marc Faber Portfolio Rolling Returns

lazyportfolioetf.com

Historical Equity-Bond Correlation

"Equity-Bond Correlation: A Historical Perspective, 2017, Graham Capital

This article was written by

Ralph Wakerly profile picture
1.34K Followers
Wakerly is an investor, entrepreneur and consultant with over 35 years of investment experience. Utilizes a macro-style, passive, index-based asset allocation investment style, with a value orientation and contrarian bent. Manages/advises on family portfolios collectively valued in the eight-figure range. B.S. Engineering and MBA in investments from University of Illinois. 11,000+ hours of investment management and research. Accomplished entrepreneur, consultant and business owner. Wakerly has a passion to help individuals improve their financial literacy and investing skills and besides writing for SeekingAlpha and Advisor Perspectives has presented at universities, churches and various webinars.

Disclosure: I/we have a beneficial long position in the shares of VTI, GLD, VEA, VNQ 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.

Additional disclosure: Disclaimer: My articles may contain statements and projections that are forward-looking in nature, and therefore inherently subject to numerous risks, uncertainties and assumptions. This information is based on my research and is subject to possible errors and omissions. While my articles focus on generating long-term risk-adjusted returns, investment decisions necessarily involve the risk of loss of principal. Individual investor circumstances vary significantly, and information gleaned from my articles should be applied to investors’ own unique investment situation, objectives, risk tolerance and investment horizon. I am not a Registered Investment Advisor or Financial Planner. I disclaim all liability with respect to investor actions taken based on the information provided here.

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