Performance & Risk Metrics (2016-2026)
| Metric | All Weather Portfolio | Classic 60/40 Portfolio |
|---|---|---|
| CAGR (10-Year Annualized Return) | 7.2% | 8.2% |
| Max Drawdown | -11.9% | -20.5% |
| Sharpe Ratio (Risk-Adjusted Return) | 0.60 | 0.48 |
| Volatility (Annualized StdDev) | 7.8% | 9.8% |
| Best Calendar Year | +16.8% | +22.4% |
| Worst Calendar Year | -6.2% | -18.0% |
| Strategy Type | Passive Portfolio (Strategic Buy & Hold) | Passive Portfolio (Strategic Buy & Hold) |
| Rebalancing Frequency | Annually (fixed target weights) | Annually (fixed target weights) |
All Weather Philosophy
Designed by Ray Dalio, the All Weather portfolio uses risk parity to balance the four economic seasons: rising/falling growth, and rising/falling inflation. It heavily weights bonds to match the volatility of stocks.
Classic 60/40 Philosophy
The classic 60/40 portfolio is based on Modern Portfolio Theory, allocating a fixed 60% to stocks for growth and 40% to bonds for stability, assuming they are uncorrelated.
Which Strategy is Right For You?
Choose GEM if: You are comfortable with monthly monitoring, invest via tax-advantaged accounts (like IRAs or 401ks in the US, or tax-wrapped accounts in Europe), and want to maximize long-term growth while protecting capital from major multi-year bear markets.
Choose 60/40 if: You prefer a hands-off, "set and forget" approach, have a taxable investment account where frequent turnover triggers capital gains tax, and can emotionally tolerate drawdowns of 20-30% without panic-selling.