It’s nothing new that the world might be heading towards a global financial dark time ahead. With the inflation rate rising, the financial after-effect of the pandemic, and the war between Russia and Ukraine, the recession seems just at the front of our door.
Earlier this month, JPMorgan’s CEO, Jamie Dimon, in an interview with CNBC, also stated his concern about the economic scene in the US.
“These are very, very serious things which I think are likely to push the US and the world – I mean, Europe is already in recession – and they’re likely to put the US in some kind of recession six to nine months from now,”
Investment During Recession
At times like this, it is best if we can make a proper diversification in our portfolio. As Warren Buffet said, “don’t put all your eggs in one basket.” But now, it leaves us with a crucial question: “what’s the right basket.”
Diversifying your investment portfolio isn’t only about dividing your money equally into different baskets. It requires a thorough risk-to-reward analysis of every investment option possible, making conjunction with our risk appetite and aligning them with the current national and global economic scheme.
Well, it goes without saying that doing all that is impossible to do by inexperienced ordinary people like us. Fortunately, Ray Dalio, a seasoned investor, hedge fund manager and the founder of Bridgewater Associates, developed an investment diversification system that can sustain through all kinds of economic seasons: the All Weather Portfolio.
Who Is Ray Dalio?
Ray Dalio is a billionaire whose current net worth is $19.1B. He was the founder of the world’s biggest hedge fund firm, Bridgewater Associates, which currently manages $150 billion worth of investment.
Ray Dalio grew up in a middle-class family in Long Island, New York. But unlike other kids interested in playing football and games, he was starting to step his foot into the investment world through listening to advice from the golfers he cadied.
Throughout his years managing investment in Bridgewater Associates, failing to predict events in the past, learning from his mistakes, and analyzing correlations between each asset, he noticed something. He realized that by having a certain proportion and combination of investment options in your portfolio, you will have a resilient portfolio that always does well, no matter the economic condition. And that’s the all-weather portfolio.
How To Apply Ray Dalio All Weather Portfolio
As we said before, the concept is simple; the all-weather portfolio diversifies your investment portfolio so that it can still make a profit, no matter the economic condition. Ray Dalio says that the Ray Dalio All Weather Portfolio strategy was explicitly designed so that investors can go through these types of events with ease:
- Bull Market
- Bear Market
The all-weather portfolio works based on the analysis by Dalio’s team towards the correlations between asset class performance and the ever-changing market condition. All these led them to an ideal asset allocation that can thrive no matter the market condition, including the recession. Here’s the breakdown of the Ray Dalio All Weather Portfolio:
- 40% is in long-term bonds
- 15% is in intermediate-term bonds
- 30% is in stocks
- 5% is in commodities
- 5% is in gold
Modifying Ray Dalio All Weather Portfolio
But of course, not everyone is a fan of this portfolio allocation for several reasons: it undermines the underlying risk of interest rate fluctuations, is too passive, and may give a too little investment return. That’s why these are not a commandment but a suggestion for some people.
Changes and adjustments are prone to be made when you consider broader options of assets such as property. Swapping some portions of the low-risk bonds for low-risk property investment options can be a great choice. And there’s no better low-risk property investment choice than having a triple-net lease.
Having A Triple Net Lease Investment
A triple net lease property investment is when the tenant of your property agrees to pay all three significant expenses of owning a property: taxes, insurance, and maintenance. That’s why it’s a very low-risk and low-commitment investment to have.
If you’re interested in having one, you must check out NetLeaseWorld. There is a wide range of triple net lease options and various locations and tenants to choose from; it’s the best platform for entry into the triple net lease investment.