Home » Investor Ray Dalio explains why he has gold in his portfolio

Investor Ray Dalio explains why he has gold in his portfolio

by admin
Investor Ray Dalio explains why he has gold in his portfolio

Billionaire investor Ray Dalio. Taylor Hill/Getty Images

Ray Dalio says he owns gold, among other things, to hedge against debt and inflation risks.

The legendary hedge fund founder once again warned of rising global debt levels.

He has warned investors of a U.S. debt crisis that could plunge the economy into a balance sheet recession.

This is a machine translation of an article from our US colleagues at Business Insider. It was automatically translated and checked by a real editor.

Ray Dalio is holding on to gold to hedge against the risks of higher inflation and a possible debt crisis in the economy.

The billionaire investor and former CEO of Bridgewater Associates points to increasing debt levels around the world, with U.S. debt surpassing $34 trillion for the first time this year. Debt problems have also plagued China, Japan and European countries – posing a major risk to those countries’ currencies, he wrote this week in a post on LinkedIn.

“History and logic show that the debt and money become unattractive when there is a great risk that they 1) will not be repaid or 2) will be repaid with depreciated money,” Dalio wrote this Thursday, April 18.

The reasons for gold in the investment portfolio

When countries are heavily indebted, central banks are likely to print more money to pay off the debt, which is a problem in itself.

“This prevents a major haircut through devaluation of money (i.e. inflation),” Dalio warned, “Gold, on the other hand, is a form of money not backed by debt. It’s like cash, except unlike cash and bonds, which are devalued by the risk of defaults or inflation, gold is backed by the risk of defaults and inflation.

See also  The growth of the Italian economy is slowing down, supported by services but held back by high interest rates

Read too

Joe Kaeser, Gnabry and Co. affected – celebrity real estate funds bankrupt

That’s the main reason Dalio has gold in his own investment portfolio, he added, calling it a “good diversifier” given high debt levels.

Gold has experienced record-breaking highs in recent weeks. Given the looming risk of recession and inflation remaining at high levels, as well as fears of major geopolitical unrest in the Middle East, investors have been buying the precious metal with great interest.

Dalio has previously sounded the alarm about the US debt balance. In the past, he has warned markets of an impending debt crisis that could lead to a balance sheet recession – a downturn that occurs when people and companies spend money to pay down their debts instead of stimulating the economy.

External content not available

Do you have a contentpass subscription but still don’t want to miss out on displaying external content from third-party providers? Then click on “agree” and we will integrate external content and services from selected third-party providers into our offer to improve your user experience. You can view a current list of these third parties at any time in your privacy (link to privacy). In this context, usage profiles (including based on cookie IDs) can also be created and enriched, even outside the EEA. In this case, your consent also includes the transfer of certain personal data to third countries, including the USA in accordance with Article 49 Paragraph 1 Letter a) GDPR. Further details on data processing can be found in our data protection information and privacy policy, which are available at any time in the footer of our offer. You can exercise your consent to the integration of external content at any time in the footer of our offer via the “Revocation Tracking” link.

See also  Large-scale strike at Britain's largest port, $800 million in trade will be disrupted - Xinhua English.news.cn

Agree and view external content

Disclaimer: Stocks and other investments generally involve risk. A total loss of the capital invested cannot be ruled out. The articles, data and forecasts published are not a solicitation to buy or sell securities or rights. They also do not replace professional advice.

You may also like

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy