The Investing Rule That Cuts RISK

Tony Robbins shares a principle he learned from Bridgewater founder Ray Dalio: build a portfolio from multiple strong return streams that don’t move together. Dalio has repeatedly described diversification among uncorrelated investments as his “Holy Grail of Investing.”
Robbins often recounts Dalio’s lesson as finding 8–12 uncorrelated investments, while Dalio more commonly describes roughly 10–15 or 15 good, risk-balanced, uncorrelated return streams. Dalio says that structure can dramatically reduce portfolio risk. The important concept isn’t simply owning more investments. Correlation measures how returns move relative to one another. If every holding responds similarly to the same economic environment, adding more holdings may provide substantially less diversification than investors expect. Dalio says approximately 15 good, genuinely uncorrelated return streams can reduce risk by around 80% without a comparable reduction in expected return. His objective is therefore improving the portfolio’s return relative to its risk, rather than merely maximizing the number of holdings.