In the world of institutional investing, few names carry as much weight as Ray Dalio. As the founder of Bridgewater Associates—the world’s largest hedge fund—Dalio pioneered a concept that has since become a cornerstone of sophisticated wealth management: the All Weather Portfolio.

At Hoovest, while we maintain our own unique investment methodology, we find deep alignment with the core principles Dalio introduced to the global stage.

The Philosophy of "All Weather"

The premise of an All Weather strategy is simple yet profound: no one can reliably predict the future. Markets move in cycles—driven by shifts in growth and inflation—and different asset classes perform better in some "seasons" than others.

While the specific, proprietary algorithms and internal weighting of Dalio’s institutional funds are not publicly disclosed, the underlying logic is accessible and mathematically sound. The goal is to create a portfolio that doesn’t rely on a "good" economy to thrive. Instead, it seeks to achieve consistent returns across all economic environments by balancing assets with uncorrelated profiles.

The Power of Low Correlation

Many investors believe they are diversified because they own dozens of different stocks. However, in a market downturn, these stocks often move in lockstep.

We agree with Dalio’s principle that the key to a resilient portfolio lies in unstructured or low-to-negative correlation. When one asset class faces headwinds, another should provide a tailwind. By combining investments that respond differently to the same economic pressures, we can significantly improve a portfolio’s risk-adjusted return over the long run.

The Hoovest Approach: A Modern Evolution

While we respect the "All Weather" foundation, Hoovest applies a modern, multi-layered approach designed specifically for the needs of private wealth and family office clients. Our firm’s philosophy is built on three distinct pillars:

1. The Core: Index-Based Stability

We believe in the efficiency of the markets. Our "All Weather" foundation often begins with a core index strategy. This provides low-cost, broad-market exposure that serves as the heartbeat of the portfolio.

2. The Enhancement: Active Management and Structured Investments

To go beyond market averages, we look for "alpha"—excess return. We achieve this through two primary methods:

• Active Management: Selecting managers who can navigate volatility and find opportunities where passive indices cannot.
• Structured Investments: Utilizing sophisticated financial instruments that can offer defined outcomes, such as downside protection or enhanced participation in market gains, regardless of the broader trend.

3. The Stabilizer: Alternative Assets and Private Securities

Perhaps the most critical "All Weather" component in the modern era is the move beyond public markets. We supplement our portfolios with alternative assets—specifically private securities. These investments often provide more stable and predictable yields than the public markets, acting as a ballast during times of high volatility. From private debt to real estate, these assets offer a "yield cushion" that traditional stock-and-bond portfolios often lack.

A Philosophy, Not a Template

While these principles guide us as a firm, we recognize that no two investors are the same.

At Hoovest, we do not believe in a "one-size-fits-all" model. Every client arrives with a different risk appetite, a unique time horizon, and specific personal preferences. Furthermore, our individual advisors and advisor teams bring their own unique styles and areas of expertise to the table.

Our "All Weather" philosophy is our North Star—a general framework of prudence, diversification, and innovation—but the final map is always drawn to fit the specific journey of the client.

Building for the Long Term

The markets will always be unpredictable, but your financial future shouldn't be. By embracing the principles of low correlation and combining traditional index strategies with private-market enhancements, we aim to build portfolios that don't just survive the storm—they thrive in every season.