15 uncorrelated bets
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15 uncorrelated bets

15-20 uncorrelated investments (at any risk level) offer significantly better risk/return characteristics than a single investment. Also called the "Holy Grail of Investing".

I asked Brian Gold, a recently graduated math major from Dartmouth who’d joined Bridgewater in 1990, to do a chart showing how the volatility of a portfolio would decline and its quality (measured by the amount of return relative to risk) would improve if I incrementally added investments with different correlations.


I saw that with fifteen to twenty good, uncorrelated return streams, I could dramatically reduce my risks without reducing my expected returns.
— Ray Dalio


Principles by Ray Dalio (page 56-57)

For a model portfolio of a Risk Parity strategy, refer to Reverse Engineering AQRs Risk Parity strategy


Risk parity

☝️ Watch this rare video (starting at 6:00) where Ray Dalio explains why he invests in at least 15 uncorrelated bets at each time.