Balanced Beta Investing
A collection of research that explains how Bridgewater created the All Weather investment strategy, the pioneer of what is now known as risk parity investing and portfolio construction.
The All Weather Strategy
More Original Insights
We believe the most important topic facing all investors today is how to manage money in a zero interest rate environment. Recently, Bridgewater’s research team published a three-part paper that outlined the challenges and potential solutions, exploring some of the commonly asked questions that investors continue to wrestle with, such as: how to get diversification in a world of zero bond yields, the increased importance of geographic diversification, and how to think about managing the risk of deflation. Read the paper by Co-CIOs Bob Prince and Greg Jensen and Investment Associate Melissa Saphier, or listen to the podcast, where Bob and Greg discuss these themes with Bridgewater’s Senior Portfolio Strategist Jim Haskel.
Geographic Diversification Can Be a Lifesaver, Yet Most Portfolios Are Highly Geographically Concentrated
February 20, 2019
Explore how portfolios with geographic diversification can help investors create a more consistent return stream by remaining resilient to the range of ways the world could unfold.
Over twenty years ago Bridgewater Associates pioneered portfolio balancing concepts that came to fruition with the creation of the All Weather asset allocation strategy in 1996. Recently, several managers have begun to offer strategies based on some of these concepts, under the banner of "Risk Parity."
March 14, 2017
Since the global financial crisis, most global asset portfolios have performed extremely well, and we are worried that this performance is creating complacency about future returns. While backward-looking returns of a traditional portfolio are near all-time highs, forward-looking expected returns are near all-time lows.
July 29, 2015
Stepping back from the market action, we want to pause for a moment and share some thoughts about longer-term investment strategy that have been part of our recent client conversations.
August 18, 2004
The vast majority of investors are making a huge mistake in their asset allocation. The mistake, once understood, is relatively easy to rectify. Yet despite our pounding the table for a decade on this issue only a tiny percentage of investors have moved significantly in the direction of truly balancing their asset class exposures. Here is what we think is preventing most of the investing world from taking the free lunch.
In 1996, Bridgewater Associates established the All Weather principles for asset allocation, which have now been more broadly adopted under the banner “Risk Parity.” In 2004, Mr. Dalio wrote an article in which he explained these principles.