All Weather Portfolio

Read more about the article Getting started with the All Seasons Portfolio

Getting started with the All Seasons Portfolio

So excited to get this project of mine started and to be honest, I have been looking forward for a while to write this first blog post, and I am slightly nervous about it too. It is Christmas time 2018 when I begin to write this and am embarking on this journey to start my own All Seasons Portfolio from scratch, and to help as many as possible with starting to save and to invest, I will share my journey to try to inspire, educate, and hopefully, get you started as well on switching your spending habits or non-interest bearing bank accounts to accumulating enough wealth to feel secure.

You may have been spending Christmas traveling to relatives or setting up for the holidays at your own home, I have spent this time with my family as well, but escaped a few hours to look into how to put the All Seasons Portfolio into practice, but I'll come to that slightly further below. The weekend 22-23 December has been amazing to take a break from the day job and finding new inspiration - the extra days off during Christmas are great for just such a purpose. Try it out next time yourself to find new ways of improving yourself.

I first came across the All Seasons Portfolio from Tony Robbins' book Money Master the Game (where, to be honest, most readers first encounter this investment strategy), where Ray Dalio elaborates how his jaw-droppingly successful asset management firm, Bridgewater Associates, manages their Pure Alpha fund.

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Read more about the article Insights – Convex Returns: The Key to a Diversified Portfolio

Insights – Convex Returns: The Key to a Diversified Portfolio

Diversification is the fundamental feature of portfolio management and asset allocation, but is there more to it than just measuring correlation and calling it a day?

In this article, we look more closely into the concept of convex return relationships between assets, ensuring that diversifiers perform and thus protect against the drawdowns of other assets in the portfolio.

Convex diversification profiles play an important role in the All Seasons Portfolio for making drawdowns shallower and creating opportunities for earning rebalancing premiums.

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Read more about the article Insights – Has gold lost its status as an inflation hedge?

Insights – Has gold lost its status as an inflation hedge?

In 2022, inflation made its presence clear and undeniable. While it can be argued whether we experienced an inflation "surprise", investors were reminded of the importance of inflation hedges in their portfolios as stocks and bonds suffered.

Gold is one such inflation hedge, but he narrative in financial media has bashed its capabilities of protecting against inflation in 2022, as the gold price ($) was barely flat for the year.

In today's article, we will be reviewing whether gold has lost its appeal as an inflation hedge, or if it rather needs to be viewed from a different angle.

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Read more about the article Insights – Optimal Time to Rebalance a Portfolio and Rebalancing Timing Luck

Insights – Optimal Time to Rebalance a Portfolio and Rebalancing Timing Luck

The theory behind investing in a multi-asset portfolio is pretty straight forward when simplifying it. You select a diverse set of uncorrelated assets, assign target weights and then you're done. Not that tricky.

It is mostly the managing part of the investment process that is more challenging. First, you have to work on your conviction to stick to the strategy and remembering why you chose the strategy in the first place. Secondly, you have to deal with rebalancing the portfolio, as uncorrelated assets are guaranteed to develop in different directions with some assets zigging when others are zagging.

The topic of rebalancing is one which I find is underserved in the literature and one that I get most questions about. Usually, it is the theory behind a portfolio that is the most exciting to write about and which is the key topic that sells and attracts more clients. The science of rebalancing, however, is just something that is covered briefly, at most.

While I have been writing about portfolio rebalancing in the past, I have recently found renewed inspiration for this topic. That inspiration turned into this post, where we are looking more closely at rebalancing luck, and if there is an optimal time in a month to rebalance a portfolio.

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Read more about the article eToro Post – Prediction versus Preparation and Why Diversification Matters

eToro Post – Prediction versus Preparation and Why Diversification Matters

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The legendary credit investor Howard Marks (founder of Oaktree Capital Management) wrote an investor memo titled "You Can't Predict. You Can Prepare." in 2001.

Although more than 20 years have passed since these words were written, the message is almost eternal for investors.

The probability of consistently succeeding as an investor in this endeavor and regularly making money over decades is vanishingly small. This is why, as a capital manager, I constantly come back to the title of Howard Marks' memo, even though the memo was written from the perspective of a credit investors. Still, the words ring at least as true for a diversified macro-oriented portfolio, such as the All Seasons Portfolio.

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Read more about the article Insights – The Case for Gold in a Diversified Portfolio

Insights – The Case for Gold in a Diversified Portfolio

Gold is a popular investment due to its ability to hedge against inflation, low correlation with the stock market, and its relationship with real interest rates. Using modern portfolio theory and the efficient frontier, investors can find the optimal allocation to gold in their portfolios that balances expected returns and risk. However, the optimal level of gold allocation will depend on an investor's specific investment objectives, risk tolerance, and financial situation. Therefore, adding gold to a well-diversified portfolio can improve its risk-return characteristics, particularly during periods of market stress.

In this article, we explore gold as an investment and inflation hedge, and briefly touch on how it fared in the inflationary year of 2022. We further look at the current case for gold in terms of real interest rates, the M2 money supply, and discuss how the gold price performs relative to also other currencies than just the US dollar.

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