Hedge Fund Titan Ray Dalio Recommends Investing in Gold

July 19, 2019 | Alternative Investments, News

Ray Dalio predicts a “paradigm shift” in investing where gold investors benefit

Ray Dalio, chief of Bridgewater Associates, predicts the ongoing party in stocks will soon run its course.

Investors are likely to headed for the exits amidst lower returns on equities, according to Dalio. In a lengthy LinkedIn post issued this week, Dalio projected a world of lower earnings, greater debt, and higher gold prices.

“Paradigm shift” in investing

As earnings shift lower, the indices may come off their record peaks. This would leave investors stranded at higher valuation levels.

“In paradigm shifts, most people get caught overextended doing something overly popular and get really hurt,” Dalio wrote Wednesday. “On the other hand, if you’re astute enough to understand these shifts, you can navigate them well or at least protect yourself against them.”

Ray Dalio’s prime example of a paradigm shift is the 2008-09 financial crisis. Dalio notes that debt growth rates were unsustainable during the run up to that crisis.

Dalio says another shift is around the corner. He cites lower interest rates and quantitative assets by central banks that will eventually become unsustainable. Amidst rising asset prices and lower future returns, the value of cash has fallen to nearly zero.

At some time in the future, real interest rate returns could fall so low that investors holding the debt will sell. Dalio believes they will seek greater returns in other assets.

The resulting scarcity of liquidity would result in the monetization of large deficits, currency depreciations, and large tax increases.

Gold prices set to shine

Dalio recommends gold in light of the rising trend of global conflict. Gold also performs well in an environment where the value of money erodes.

“I believe that it would be both risk-reducing and return-enhancing to consider adding gold to one’s portfolio,” he says.

Dalio has also warned that the Federal Reserve could lose control of the economy.

With negative interest rates popping up around the globe and equity markets facing increased volatility, gold and silver could benefit as investors flock to safety.

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Latest Alternative Investment News

Alternative Investments/Digital: Two Canadian Fund Managers Launch Metaverse Themed ETFs
December 1, 2021     Alternative Investments, Digital Assets, News

Canadian fund managers Horizons ETFs and Evolve Funds have launched the Horizons Global Metaverse Index ETF (“MTAV”) and the Evolve Metaverse ETF (“MESH”) respectively, on the Toronto Stock Exchange.

Digital Assets: Grayscale Launches Solana Trust, Protests SEC Rejection Of VanEck Spot Bitcoin ETF
December 1, 2021     Digital Assets, News

Grayscale Investments announced Tuesday the launch of the Grayscale Solana Trust to provide investors with exposure to Solana (SOL), the native token of the Solana network, a smart contract platform…

Venture Capital: Digital Temp Staffing Startup Jobandtalent Snags $500M Series E
December 1, 2021     News, Venture Capital

Madrid-based temp staffing marketplace Jobandtalent announced the closure of its Series E raise of $500 million at a valuation of $2.35 billion from Kinnevik and SoftBank Vision Fund 2. Existing…

FinTech: BNPL Was “One Of The Stars” Of The Holiday Season For PayPal
December 1, 2021     FinTech, News

PayPal (NASDAQ: PYPL) enjoyed solid volumes for its buy-now-pay-later (BNPL) offering on Black Friday, continuing a trend the giant payments fintech observed all through November. In that month, for the…