Economic Template by Ray Dalio

The following 30-minute video is probably the best "easy-to-understand" template for how the economy works that I have come across.  Ray Dalio is the founder and head of Bridgewater Associates, the world's largest hedge fund with $122 billion in assets under management.

Broad Asset Performance

There has been a wide diversion in many asset classes thus far in 2013.  US and Japanese stocks have led while US Treasury Bonds, Emerging Markets, and Commodities have suffered from rising interest rates and volatility in currency markets.  

Depending on allocation, a  basic diversified portfolio is likely flat for the year despite double digit gains in US stocks.  Many investors have been told that bonds offer a safe, steady income stream - and they have increased their bond allocations accordingly in recent years.  

Broad Indexes	Ticker	YTD
Global Stocks	ACWI	8.07%
Core Total US Bond Market	AGG	-4.78%
Commodities	DBC	-4.43%
US Related
Large Cap	IWB	15.79%
Small Cap	IWM	19.86%
SPDR S&P 500	SPY	15.43%
Dow Jones Industrial Average	DIA	13.42%
Bonds
Treasury Bonds - 7-10 yrs	IEF	-7.26%
Treasury Bonds - 20yr +	TLT	-13.70%
Inflation Protected Treasury Bonds	TIP	-9.46%
Corporate Bonds	LQD	-7.17%
High Yield Bonds	HYG	-2.95%
International
EAFE	EFA	6.79%
Emerging Markets	EEM	-12.55%
Frontier Markets	FRN	-20.80%
Alternatives & Commodities
US Real Estate	IYR	-3.96%
Gold	GLD	-17.02%
Silver	SLV	-22.68%