Author Topic: What do people think of the Ray Dalio portfolio in Money Master the Game?  (Read 3109 times)

decessus

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I recently read Tony Robbins' MONEY Master the Game: 7 Simple Steps to Financial Freedom.

What do people think of the Ray Dalio portfolio and/or the David Swensen portfoilo described in that book to get you to FIRE in a quick and stable way?  I currently skew more towards stocks due to my age, but the idea of adding commodities and bonds with stocks at 30% to add stability to the portfolio is interesting.

  • David Swensen Portfolio ( 20% Domestic stock, 20% international stock, 10% emerging stock, 20% REITs, 15% long-term us treasury, 15% tips)
  • Ray Dalio portfolio (stocks 30%, intermediate US bonds 15%, long term us bonds 40% 15%, gold 7.5%, commodities 7.5%)
« Last Edit: January 04, 2016, 09:47:37 PM by decessus »

Scandium

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Well you asked for opinions:
Stability (i.e. bonds) is only to prevent you from selling in a down market. All other times it will reduce returns.
Commodities are gambling, they have no inherent return. I don't gamble with my portfolio so see no reason to touch them.


andy85

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check out this badass little site from a forum member here (Tyler)
http://portfoliocharts.com/portfolios/

Swensen's portfolio is on there, but not Dalio's....it is really interesting stuff.

GrOW

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Its not terrible advice just not something that hits home with me.

I view Tips, Reits, and Commodities as more of market timing options. Not market timing as in daily trading but as in they are good investments for periods of time in each decade and not so good in longer periods of time. I do not typically put enough effort into my investment mix to worry about timing those things so I guess if I was inclined to want to own them that I could via a target date fund. Many of those funds carry decent %s in those areas.

Axecleaver

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Ray Dalio's philosophy is based on market timing. His track record is based on exploiting new financial instruments and using leverage to increase returns (and risk) using market timing, or as I like to call it, gambling. It's not my cup of tea.

The %'s you quoted are a little off: 30% stocks, 15% intermediate term bonds or t-bills, 40% long term bonds, 7.5% gold, 7.5% commodities. IMHO, with so much in bonds it doesn't really give you much growth. It does limit your risk pretty well.

http://finance.yahoo.com/news/tony-robbins--ray-dalio-s--all-weather--portfolio-161619133.html

Tyler

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check out this badass little site from a forum member here (Tyler)
http://portfoliocharts.com/portfolios/

Swensen's portfolio is on there, but not Dalio's....it is really interesting stuff.

I've fixed that for you.  ;)  Try this.

To answer the OP's question, I personally think there's a lot of value in portfolio diversification beyond simply throwing everything in stocks.  Dalio and Swensen both offer good examples, but their specific AAs aren't necessarily magical and there are other good mixes as well.  If you're into that line of thinking, you'll probably find the portfolios in the link above helpful. 
« Last Edit: January 04, 2016, 10:42:54 PM by Tyler »