This wasn’t the blog I intended to write this week, but circumstances triggered a thought process and so here we are.

I was reading a book on investment strategies this week and came across an interesting strategy call the All Seasons Portfolio. I hadn’t heard of it before so I did some research. All Seasons is a simplified version of Ray Dalio’s All Weather portfolio with the idea you allocate your portfolio as

  • 30% Stocks
  • 40% Long Term Bonds (over 20 years)
  • 15% Short Term Bonds (3 – 7 years)
  • 7.5% Gold
  • 7.5% Commodity Index

You can replicate this distribution fairly easily using ETF’s. The article recommended a specific ETF for each category (VTIP, TLT, IEI, GLD, and GSG), and rebalancing on an annual basis. As I am looking for a place to invest some liquid funds, I decided to check it out.

The first step was to find a date when all five of the recommended ETF’s were trading and that came out to be late 2012, so I picked December 1 as the start date. It took a little effort but with the help of Yahoo Finance, I was able to get the closing prices for each ETF on December 1 (or the nearest date) from 2012 to 2024 and put them into a spreadsheet.

After that, it was a simple exercise to determine my hypothetical investment capital of $5,000, calculate the allocations, and annual rebalancing. It probably took me an hour or so to get it all put together, and the results surprised me. On December 2, 2024, the value of the portfolio was $2,320.26, a loss of 54%.

Can’t be right. I checked my logic and checked my calculations and had someone else look them over as well. They agreed my logic and calculations looked correct, and so Wow!

We are always reminded to fact check and reality check politicians. This exercise reminded me how important it is to reality check investment recommendations as well.