Bridgewater Associates’ Ray Dalio will be performing live in March on CNBC’s Converge Live.
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Bridgewater Associates founder Ray Dalio said investors should allocate 15% of their portfolio to gold, even if precious metals surge above $4,000 to their all-time high.
“Gold is a very good diversifying device for our portfolio,” Dario told the Greenwich Economic Forum in Greenwich, Connecticut on Tuesday. “From a strategic asset allocation perspective, there could be something like 15% of a portfolio. There would be 15% of a portfolio because it would work very well when a typical portion of a portfolio goes down.”
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Until the year of gold futures
Gold futures were last traded at $4,005.80 per ounce. Prices have skyrocketed over 50% this year amid rising budget deficits and rising global tensions.
Billionaire investors compared today’s environment to the early 1970s. In the early 1970s, inflation, government spending and high debt load erode trust in paper assets and Fiat currency.
“It’s very similar to the early 70s…where do you put your money?” he said. “When you have money, put it in debt instruments, and there is such a supply of debt and debt, it is not an effective reservoir of wealth.”
Dalio’s recommendations contrast with the typical portfolio guidance of financial advisors who instruct clients to hold primarily stocks and some bonds in a split of 60-40. Alternative assets such as gold and other commodities usually have a low single-digit percentage of their portfolio due to lack of income.
Doubleline Capital CEO Jeffrey Gundlach recently recommended weighting gold as much as 25% in its portfolio, as he believes gold stands out behind inflationary pressures and low dollars.
Dario said gold stands out as a hedge in times of financial decline and geopolitical uncertainty.
“Money is the only asset someone can hold and you don’t have to resort to someone else to pay you,” he said.
