The Holy Grail of Ray Dalio: Invest with minimal volatility

The hedge fund manager Ray Dalio is a legend because he is one of the few Wall Street stars who can think outside the box. Dalio foresaw the bursting of the US real estate bubble – and drew his lessons from it:

  1. a portfolio does not need many different assets
  2. the assets you have in your portfolio should correlate as little as possible with each other (risk parity)

Although Dalio did not achieve a performance with this strategy that was significantly better than that of the major stock indices, but the performance was much more stable because, unlike the stock indices, the drawdowns were minimal.

But see for yourself how Dalio’s logic works – and how you can replicate it with ETFs yourself:

Ray Dalio. Photo: Grameen America – (CC BY 3.0) – Extract from original photo

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