Portfolio Allocation by Cycle Phase Framework

The same asset that compounds wealth in one phase of the cycle destroys it in another. Knowing which assets belong in the portfolio at which phase is the foundational skill of macro-aware portfolio construction.

Why This Matters

Dalio's All-Weather Portfolio established that different asset classes perform best in different macroeconomic environments — and that a portfolio positioned for all environments simultaneously sacrifices returns in any given environment. The alternative is active cycle-aware allocation: adjusting the mix across equities, bonds, real assets, and cash as the cycle phase shifts. This framework provides specific allocation targets for each of the five cycle phases identified by the Economic Cycle Positioning Framework.