It's been a bleak week or so for the markets. Stocks have plunged, putting the S&P 500 on pace for its worst year in a decade. On Monday, former Federal Reserve chair Janet Yellen expressed fear about another looming financial crisis.
But booms and busts are all part of a larger economic cycle, according to Ray Dalio. And the billionaire Bridgewater Associates founder says there is a way to invest that will help you weather any economic environment.
"You can immunize yourself from the cycle by holding a balanced portfolio of assets," Dalio told CNBC Make It in September.
And Dalio has a simplified "all-weather" asset allocation formula that just about any investor can use.
This all-weather portfolio, which Dalio created for the Tony Robbins book, "Money: Master the Game," involves a mix of 30 percent stocks, 40 percent long-term U.S. bonds, 15 percent intermediate U.S. bonds, 7.5 percent gold and 7.5 percent other commodities. The portfolio needs to be re-balanced annually, Dalio notes.