On December 11, the founder of Bridgewater Associates, one of the world's largest hedge funds, billionaire investor Ray Dalio stated that he would invest in hard currencies like gold and Bitcoin while avoiding debt-type assets, as most major economies are facing rising debt levels.
Dalio stated during a financial conference in Abu Dhabi on Tuesday, 'I believe that we are likely to see debt currency issues. I want to stay away from debt-type assets like bonds and hold some hard currencies like gold and Bitcoin.'
He added that the debt of many major countries, including the United States, has reached 'unprecedented levels' and emphasized that the current debt levels are unsustainable. 'These countries are likely to face a debt crisis in the coming years, leading to a significant depreciation of currency value.'
Five key forces
Dalio included 'debt, currency, and economy' as one of the five key forces that he believes will drive almost everything.
The other four major driving forces include:
Domestic political order driven by wealth and value gaps
External geopolitical order triggered by power conflicts
Natural disasters (such as droughts, floods, pandemics, and climate change)
The invention of new disruptive technologies
As investors seek to hedge against economic uncertainty, geopolitical tensions, and the impact of the latest monetary policies, the prices of gold and Bitcoin have repeatedly hit record highs this year. Following favorable comments on digital assets from elected President Trump, Bitcoin surged to break $100,000 for the first time last week.
It is worth mentioning that Dalio previously believed that cryptocurrencies like Bitcoin would not succeed as some hoped, but in recent years he has become a major supporter of Bitcoin.
In 2022, Dalio stated that it is reasonable to allocate up to 2% of the portfolio to Bitcoin as a hedge against inflation, in addition to gold.
Disruptive technologies and major trends
Dalio also expressed in his latest speech that he prefers to invest in companies that utilize disruptive technologies to improve their business rather than those that sell the most products or services.
Dalio also suggested that people should not get too caught up in the daily fluctuations of headlines but rather consider the big trends more. 'Think strategically and tactically, have a global perspective, and recognize that what you don't know about the future far exceeds what you do know.'
He also added that the investment strategy should include diversification and functionality to address potential threats and opportunities.
