The all-weather asset allocation portfolio written on this whiteboard is wrong.

The correct asset allocation for an all-weather investment portfolio is as follows:

Stocks: 30%; Long-term Treasury Bonds: 40%; Medium-term Treasury Bonds: 15%; Commodities: 7.5%; Gold: 7.5%

The main reason for choosing this asset allocation is based on the "seasonal" theory of economic cycles. According to Ray Dalio, there are four "seasons" that affect asset valuations:

1: Inflation.

2: Deflation.

3: Economic growth.

4: Economic recession.

These four states primarily depend on changes in the economy and monetary conditions.

When the economy enters an expansion phase, it moves into a period of economic growth. When the economy enters a contraction phase, it moves into a recession. Relative to economic expansion or contraction, if the growth rate of money exceeds economic growth, we will experience inflation. Conversely, if the contraction rate of money exceeds economic recession, we will experience deflation.

Based on these factors, Ray Dalio stated that we cannot precisely predict the future, but we can clearly know that the future will inevitably include the following possibilities:

Higher-than-expected inflation (or deflation)

Lower-than-expected inflation (or deflation)

Higher-than-expected economic growth (or recession)

Lower-than-expected economic growth (or recession)

Therefore, he constructed an asset portfolio that comprehensively covers various expectations, using different proportions of asset types to address potential future scenarios.

When the future is characterized by economic growth and rising inflation, stocks and commodities perform well.

When the future is characterized by economic recession and persistent deflation, gold and bonds perform well.