Would You Have Held Through This?
Between 2020 and 2025, COVID crash came, then a fastest rate hikes in 40 years, 2022 where stocks AND bonds fell together for the first time since 1969, trade wars, a US credit downgrade, geopolitical shocks. What did most investors do?
They panic-sold. They tried to predict what was next.
One investor didn't. Ray Dalio spent 25 years building a portfolio with one goal..stop trying to predict. Build something that does okay in every economic season (growth, recession, inflation, deflation). No matter what.
That portfolio is called the All Weather Portfolio. It is the foundation of what I consider a true inflation-proof portfolio strategy. Let's see what it is, what it does and where it falls short.
A few things that shock me the first time I dug into this:
In 2008, the S&P 500 fell 51%. The All Weather Portfolio fell only 4.3%. Same crisis, different experience.
In 2022, stocks and bonds fell together, something not seen in over 50 years. It was one of the rare times the original All Weather Portfolio couldn't fully protect investors.
Gold rose 65% in 2025, biggest annual gain since 1979. The portfolio's gold allocation, which many people called "too small to matter," turned out to be the MVP.
The average actively managed fund investor underperforms the fund itself by 1–2% per year (ouch). Imagine paying professional to lose on a passive ETF fund
Any period in economic history going back centuries can be sorted into just four types. Not 47 complex scenarios. Just four.
The Big 4 Economic Seasons
Any period in economic history (even going back centuries) can be sorted into just 4 types. Not 47 complex scenarios. Just 4.
In bull market, risk assets win (Stocks, Commodities)
In recession, safety assets shine (Long-term Bonds, Gold).
In stagflation, bonds suffer badly (Gold and Commodities win).
and in deflation, cash becomes valuable (Bonds love this).
The problem with most portfolios? They are built for ONE season. Most people overweight stocks, they are betting that growth continues. Dalio's solution? own something that wins in every season. So when one asset is suffering, another is covering it.
The Original All Weather Allocation
After 25 years of research at Bridgewater Associates, Dalio arrived at this 👇
Why so many bonds?
Stocks are volatile, a 30% allocation carries the same risk as an 80% bond allocation. Stocks are much riskier than bonds, so you need more bonds to balance the portfolio. The goal is to balance risk, not to chase higher returns.
How It Actually Performed (Honestly)
Here is the real data. Not cherry-picked. Not just the good years.
The pattern is clear. The All Weather Portfolio will never top the chart in a bull year. It will also never devastate you in a crash year. That is the whole point.
But there is an exception in 2022, when the portfolio fell around 16-24%. It happened because bonds AND stocks fell together for the first time in over 50 years. This was the one scenario the original All Weather did not fully hedge. More on this below.
Crash comparison (the real test)
During the 2008 Global Financial Crisis, the All Weather Portfolio lost only 4.3%, while the S&P 500 fell 51%. Imagine you had ₱1,000,000 invested:
• All Weather Portfolio - about ₱957,000 remaining
• S&P 500 - about ₱490,000 remaining
Losing ₱43,000 is painful. Losing ₱510,000 is life-changing.
What if you have ₱10 million(not impossible since it's long term)? A 51% decline means watching ₱5.1 million disappear is damaging. That's the kind of loss keeps people awake at night and causes many investors to panic sell.
The same thing happened during the COVID crash in 2020. The All Weather Portfolio fell about 11.2%, while the S&P 500 briefly dropped 34% before recovering.
The lesson is simple, the All Weather Portfolio isn't built to win every year. It's built to help investors stay invested when markets become scary. Sometimes avoiding a massive loss is more important than chasing the highest return.
The Gold Story
The 2025 proved that diversified portfolios is right. Here is what happened to each All Weather asset:
In 2025, gold surged about 60%, making it one of the year's best-performing assets. The All Weather Portfolio's modest gold allocation, often dismissed as too small to matter, turned out to be a star performer.
Source: BlackRock Advisor Outlook 2026. Gold return source: BullionVault (gold +65% in 2025, annual average +44%). WisdomTree ETF Blog, September 2025.
What BlackRock Says Has Changed (thing to keep in mind)
Here is the part most All Weather articles skip. The strategy was built for a world where stocks and bonds move in opposite directions. That correlation has shifted.
BlackRock's view: bonds may not provide the same protection they did in the past, making diversification more important than ever.
The core idea behind the All Weather Portfolio still makes sense: own different assets that perform well in different economic conditions.
However, the original 40% allocation to long-term bonds may not work as well today as it did when Ray Dalio designed the strategy decades ago.
For Filipino investors, this is less of an issue because long-term US Treasury bonds aren't easily accessible anyway. That's why the TFM version below may be a better fit for our situation.
How I Would Build an All Weather Portfolio as a Filipino:
You do not need US Treasury ETFs to build an All Weather portfolio. Here is how Filipino investors can replicate the logic using what is actually accessible to us:
Why MP2 instead of long-term bonds? Two reasons: (1) MP2 at 7.12% tax-free actually exceeds what most Philippine bond funds return after fees. (2) Unlike long-term Treasuries, MP2 is not price-sensitive to interest rate movements. It is a government savings program with a fixed declared dividend rate. That makes it a more stable "bond" substitute for PH context.
Why gold + silver instead of commodities? There is no clean broad-commodities feeder fund in the Philippines. Gold and silver are accessible as physical bullion locally or as Ireland-domiciled ETFs via IBKR. Together they hedge both monetary inflation (gold's anchor role) and demand-driven inflation (silver's industrial-demand sleeve).
₱10,000/Month for 25 Years
Here is how the TFM All Weather approach compares to alternatives over 25 years at P10,000/month (illustrative; not a forecast):
The All Weather Portfolio gives up some upside in exchange for a smoother ride. You may earn less than a pure S&P 500 portfolio, but you're more likely to stay invested during market crashes.
Morningstar's 2025 Mind the Gap study found that investors earned about 1.2% less per year than the funds they invested in, largely because of poor timing. The lesson: a portfolio you can stick with is often better than one with higher returns that causes you to panic during market crashes.
Source: Morningstar
Is the All Weather Portfolio Right for You?
This is not for everyone. Here is an honest framework:
For most Filipino investors early in their career, the 3-Fund Portfolio (VUAA + VWRA + MP2) is still the better starting point. But as you build wealth, age, or approach financial independence, adding gold and commodity exposure to your existing portfolio is a smart upgrade.
Good luck on your investing journey and enjoy the process.
A Quick Note
Everything here reflects my own personal investing journey, not financial advice. What works for me may not work for you. Due to regulatory guidelines in the Philippines, I'm also not able to recommend specific brokers or platforms. Where you open your account is entirely your call.
Do your own research. Always.