How I’m Building My Own “All-Weather” Portfolio

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Last week I mentioned Ray Dalio’s idea of “uncorrelated returns.” If you missed that post, you can catch up here.

I didn’t dive into it much, and I wanted to give the concept some real-world context—because you don’t need to be Ray Dalio to make this work.

Dalio has hundreds of analysts, quant models, and a wall of monitors running factor regressions in the background. And honestly, for someone managing billions, that level of precision is necessary.

For the rest of us? We don’t need 99.99% accuracy.

We can get most of the benefit using common sense.

Dalio’s core idea is straightforward:

Great in theory. But what does that actually look like for someone with a real job, a family, and a finite amount of energy?

Here’s what it looked like for me.

1. Why I Got Into Residential Real Estate

I didn’t enter the residential real estate market with a grand investment thesis. I entered because I needed a place to live.

It was October 2020. I was tired of renting, but real estate prices were going insane. Homes were selling above asking. Inventory was chaotic. And most of all, I hated the idea of paying top dollar for a house—an asset that didn’t produce income.

So I decided to house hack: buy a multifamily property, live in one unit, rent out the other.

That way I had a place to live AND owned an asset that appreciated AND produced income.

At this point, I already had meaningful exposure to the stock market—both index funds and individual positions. For someone already overweight in equities, real estate was a rational counterweight.

Real estate has its own cycles, its own drivers, its own quirks. It doesn’t move just because Apple missed earnings or because the Fed hinted at tightening.

And people will always need a place to live.

2. Why Pinckney Made Sense

I bought my first rental property in Pinckney, Michigan.

To be clear: Pinckney isn’t glamorous. It’s not booming. It’s not a media darling market.

But geographically? It’s positioned perfectly.

It sits in a triangle between Ann Arbor, Brighton, and Lansing—each with its own economic and cultural moat.

• Ann Arbor: University of Michigan + healthcare + tech spillover

• Lansing: Michigan State University + state government

• Brighton: Suburban commuters with stable incomes

Pinckney is the quiet bedroom community between them.

Not a nightlife town—a commutable town.

And commuting towns don’t need explosive growth to remain valuable. They need job centers on either side of them. That’s it.

My rental demand wasn’t dependent on one town—it was backed by three.

In a sense, investing in Pinckney was like buying stability.

3. Why I Didn’t Buy the Duplex Next Door

After a while, I considered buying the neighboring properties, including the duplex next door.

On paper, it made perfect sense:

• I knew the town

• I knew the tenant base

• I knew the property type

• I could benefit from economies of scale

And that’s exactly why it didn’t make sense.

Buying the duplex next door would’ve concentrated my risk into the same exact economic engine:

• Same council

• Same employers

• Same school district

• Same vulnerability

It would’ve doubled my exposure without actually diversifying anything.

Smart diversification isn’t “own more stuff.”

It’s own stuff that makes money for different reasons.

So if I wanted to scale responsibly, I needed to look elsewhere.

4. How Southeast Michigan Markets Each Play a Different Role

As I looked at properties around Southeast Michigan, I thought deeply about the tenant pools behind them. This lens—who pays the rent, and why—became just as important as granite countertops or cap rates.

Below are simplified summaries (not exhaustive, but “good enough” for my purposes):

Ann Arbor

• University + medical system

• Grad students, researchers, hospital staff

• Demand tied to education/healthcare (not manufacturing cycles)

Plymouth/Canton

• Elite school systems

• Higher-income families

• Stability driven by different socioeconomic forces

Livonia

• Engineering-heavy workforce

• Many renters on contract jobs with the Big Three

• High turnover, job-driven demand = ideal for rentals

Westland

• Working-class renters

• More C-class housing

• Higher yields, higher turnover, different risk profile

Different renter pools. Different economic drivers. Different risk signatures.

I would rather own one property in each of these markets than five in the same zip code.

5. “Aren’t they all correlated since they’re all in Southeast Michigan?”

Of course—there’s regional correlation.

But the drivers aren’t identical.

And that nuance matters.

To be truly uncorrelated, I’d need to buy in different states with different economies altogether. But long-distance rentals bring their own issues: management complexity, contractor reliability, cultural differences, and fragile logistics.

It’s always a balance between diversification and operational risk.

6. The Simplest Question You Can Ask

For every asset you own—or think about buying—ask:

If the answer is no, you’re building resilience.

If the answer is yes, you’re not diversifying—you’re multiplying. And that’s not always bad. You just need to ask whether doubling down is truly worth it.

The Bottom Line

You don’t need complex models to apply Dalio’s principle.

You need awareness of what drives each investment and market:

• Ann Arbor depends on university + healthcare demand

• Livonia depends on engineering/manufacturing jobs

• Westland depends on wage pressure

• Pinckney depends on commuters

These forces operate independently enough to stabilize your portfolio through cycles.

If you want to build real wealth without betting everything on one story, this is where you start.

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