AllWeather

All Weather is an investment framework popularized by Bridgewater Associates in the 1990s. It is designed to deliver stable, risk-adjusted returns across a wide range of macroeconomic conditions, rather than relying on market timing. The approach is commonly described as risk parity: assets are allocated so that each contributes roughly the same amount of risk to the overall portfolio, rather than being allocated by capital weight alone.

Typical components include equities, nominal government bonds, inflation-protected bonds, and commodities. The exact mix is not publicly disclosed and can vary; leverage may be used in some implementations. The goal is to balance exposure to growth, inflation, and deflation risks across asset classes to dampen volatility and preserve purchasing power.

The All Weather design targets multiple macroeconomic environments, seeking to perform in regimes of strong or weak growth with varying inflation pressures. Proponents argue that diversification and risk-parity allocation reduce drawdowns during adverse cycles. The concept is closely associated with Ray Dalio and Bridgewater, though implementations differ among institutions and index-trackers.

Critics point out that the strategy relies on historical correlations that may not hold in future regimes, can involve leverage, and may struggle in persistently favorable or unfavorable conditions for certain assets. As with many institutional strategies, performance depends on execution, risk controls, and fees.