How it works › How Barudion Dynamic Portfolios Work
If you have invested in stocks or ETFs before, or if you are interested in starting to invest, you will always face questions such as: Is it the right time to invest? Is the stock market going to crash soon? Would it be better to invest in gold or commodities right now? Should I play it safe and invest in government bonds instead? Should I diversify and sacrifice growth for stability, or should I concentrate my investment to maximize return? Barudion offers model portfolios that answer these questions and guide you to be optimally positioned both in times of economic instability and in times of economic boom periods.
Our model portfolios adapt dynamically to changing market conditions, reallocating capital between popular ETFs that cover stock indices, government bonds, and commodities. By signing up to Barudion, you gain access to periodic portfolio updates, and our online tools will guide you step-by-step to replicate these ETF portfolios in your own brokerage account. In this way, you benefit from our market insights and at the same time you remain full control over your capital. Barudion is not a robo-advisor or a hedge fund, we do not execute trades for you. Instead, we provide an exact blueprint for you to follow along, which will help you reduce risk and increase the growth rate of your portfolio.
Our model portfolios rest on the shoulders of a giant, the American investor Ray Dalio. His advice for long-term investors always has been to be as diversified as possible across different markets (including stocks, bonds, commodities), as these markets tend to counter and stabilize each others' fluctuations in difficult economic situations such as inflation or during recessions.
Ray Dalio implemented his principle of maximal diversification in his All-Weather Portfolio that allocates capital to five different ETFs at fixed weights:
While these static weights render Ray Dalio's All-Weather Portfolio rather simple to implement, they also represent its biggest weakness: with an annual growth rate (CAGR) of 6.8%, it cannot compete with an investor who simply buys the S&P 500 stock index and obtains a growth rate of 9.6%. The cost of being fully diversified at all times is rather high!
Barudion aims to provide the optimal trade-off between diversification in different markets and concentration of invested capital. We build our model portfolios using the same ETFs as Ray Dalio's All-Weather Portfolio, to cover the same breadth of different markets. However, we do not keep the allocation weights static. We believe that market price fluctuations provide insights into how large, informed market participants (such as pension funds and hedge funds) reallocate their capital as macroeconomic conditions change, and we believe that statistical analysis helps us to align our own portfolios accordingly - allowing us to avoid large losses and profit from outperforming assets.
Before we go into more details on how our statistical algorithm works, we briefly introduce the three model portfolios that Barudion offers.
Our Free Portfolio is an offer to you to try out Barudion's service at zero cost, and it offers Ray Dalio's classical All-Weather Portfolio as described above. By signing up for a free account, you gain access to our user portal that will guide you through the process of setting up your copy of the All-Weather Portfolio using popular ETFs, and you will get periodic notifications whenever you need to rebalance your ETF positions to stay in line with the model portfolio. Our Free Portfolio is a great option to get to know our user portal and start your journey into systematic investing.
Our Basic Portfolio aims to provide the same growth rate as the S&P 500 stock index, but at half the risk. It invests in 5 different ETFs that cover stocks, bonds, gold, and other commodities. By signing up for a paid Basic account, you gain access to the dynamical weights of the Basic Portfolio that our statistical algorithm periodically adjusts. Our user portal will guide you through the necessary steps to copy and periodically re-adjust the portfolio in your own brokerage account, and you will get periodic notifications whenever you need to rebalance your ETF positions to stay in line with the model portfolio. Our Basic Portfolio is a great way of minimizing the risk of your portfolio, while keeping the benefit of a high growth rate!
Our Pro Portfolio aims to outperform the S&P 500 stock index, while retaining a comparable risk profile. It invests in 3 different, leveraged ETFs that cover stocks, bonds, and gold. By signing up for a paid Pro account, you get access to the dynamical allocation weights of both the Basic and the Pro Portfolio. Again, our user portal will guide you through the necessary steps to copy and periodically re-adjust the portfolio in your own brokerage account, and you will get periodic notifications whenever you need to rebalance your ETF positions to stay in line with the model portfolio. Our Pro Portfolio is a great way of maximizing the growth rate of your portfolio, while maintaining the risk profile of a stock index investor!
