Ray Dalio wasn't even talking about short-term bonds, but medium-term Treasury bonds.

The performance of the all-weather portfolio in the four economic seasons is as follows:

Higher-than-expected inflation (rising prices):

Commodities (such as gold) and stocks perform well because they typically appreciate during inflationary periods.

Bonds may underperform because inflation erodes the real value of fixed income.

Lower-than-expected inflation (or deflation):

Long-term Treasury bonds and medium-term Treasury bonds perform well because interest rates usually fall, leading to rising bond prices.

Stocks and commodities may underperform due to slowing economic growth or falling prices.

Higher-than-expected economic growth:

Stocks and commodities perform well as corporate profits increase and demand rises.

Bonds may underperform because rising interest rates lead to falling bond prices.

Lower-than-expected economic growth:

Long-term Treasury bonds and medium-term Treasury bonds perform well as investors seek safe assets and interest rates decline.

Stocks and commodities may underperform due to declining corporate profits and reduced demand.

Accordingly, replace cash (SGOV) with IEF.

Opportunity cost_JEPQ (30%), risk-free arbitrage_TLT (40%), fixed income_IEF (15%), risk hedging_GLD (7.5%), cyclical hedging_DBC (7.5%)—invest at quarterly lows.

Index (30%), long-term bonds (40%), medium-term bonds (15%), gold (7.5%), commodities (7.5%).