Ray Dalio Investment Analysis Prompt

A complete Dalio-style investment analysis framework. Covering seven key dimensions: economic machine understanding, debt cycle analysis, radical truth, asset allocation, and risk parity principles. Use AI to analyze investments through Dalio's principles-based approach and macroeconomic perspective.

Full Prompt Content

Classic Investment Rules
Deep dive into the timeless investment principles that have guided generations of successful investors.
Big Picture Thinking
Don't get lost in the details. Always keep the big picture in mind and prioritize accordingly.
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Mistakes as Learning
Every time you make a mistake, you should be grateful because you have an opportunity to learn from it and improve.
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All-Weather Strategy
Structure your portfolio to perform well across all economic environments - growth, recession, inflation, and deflation.
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The Economic Machine
The economy works like a simple machine. Three main forces drive it: productivity growth, short-term debt cycle, and long-term debt cycle.
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Five-Step Process
Use the 5-Step Process to get what you want: 1) Set clear goals, 2) Identify problems, 3) Diagnose root causes, 4) Design solutions, 5) Execute.
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Getting Started
What is the 'economic machine' Dalio refers to?
Dalio views the economy as a machine driven by three forces: (1) Productivity growth (long-term), (2) Short-term debt cycle (5-8 years), (3) Long-term debt cycle (50-75 years). Understanding where we are in these cycles helps predict economic trends and asset performance.
What is 'radical truth' and 'radical transparency'?
Radical truth means facing reality objectively, acknowledging mistakes, and learning from them. Radical transparency means operating openly, sharing information freely, and encouraging honest feedback. These principles help eliminate bias and improve decision-making.
What is Dalio's 'All Weather' portfolio strategy?
A risk-balanced portfolio designed to perform reasonably well across all economic environments - growth, recession, inflation, and deflation - by diversifying across uncorrelated asset classes. The typical allocation is 30% stocks, 40% long-term bonds, 15% intermediate bonds, 7.5% gold, and 7.5% commodities, balanced by risk contribution rather than capital weight.
How to Use
What is risk parity and why does Dalio use it?
Risk parity balances portfolio risk across asset classes rather than balancing capital. Traditional 60/40 portfolios have 90% risk from stocks. Dalio's All Weather portfolio spreads risk equally across stocks, bonds, gold, and commodities for better risk-adjusted returns.
How can individual investors apply Dalio's principles?
Start with the All Weather portfolio concept: diversify across uncorrelated assets that perform in different economic environments (growth, inflation, deflation, recession). Rebalance regularly. Focus on what you don't know rather than what you think you know.
How does this prompt apply Dalio's macro analysis to individual stocks?
The prompt evaluates where we are in the economic cycle, how the company is positioned for different macro scenarios, and whether the stock fits a risk-parity approach. It considers factors like debt sensitivity, inflation exposure, and cyclical positioning to assess how the company would perform across growth, recession, inflationary, and deflationary environments.
Advanced Questions
What does 'radical transparency' mean for investment analysis?
Dalio advocates being brutally honest about what you don't know. The prompt encourages identifying assumptions, stress-testing your investment thesis, and acknowledging blind spots. Rather than seeking confirmation of your views, it pushes you to find the strongest arguments against your position and evaluate how your analysis could be wrong.