Billionaire Ray Dalio, founder of the world’s largest hedge fund Bridgewater Associates, has shared his investment strategy with cryptocurrency as part of his portfolio. He warned that cash was the worst investment as it would be eaten up by inflation.
Investment advice from Ray Dalio: Cash loses value, portfolio diversify well
Bridgewater Associates founder Ray Dalio shared his investment strategy last week. He is currently Chairman and Co-Chief Investment Officer of Bridgewater Associates. His firm’s clients include foundations, governments, foundations, pensions and sovereign wealth funds.
In an interview with Yahoo Finance published on Friday, he stated that he sees cryptocurrency “as alternative money in an environment where the real value of cash is plummeting.” Regarding Bitcoin, he said:
I find it very impressive that this programming has still held up over the past 10, 11 years. It wasn’t hacked and so on. And it has an adoption rate.
When asked how concerned he was about inflation, Dalio replied, “I am very concerned about this. Because the amount of money and credit that needs to be produced and budgeted is a huge increase. “
The billionaire noted that “cash is junk,” adding, “Cash, which most investors consider the safest investment, is the worst investment I think, and that’s important because it is losing purchasing power.” He pointed Point out that “Cash is losing 4% or 5% to inflation, like this year. So be careful because I think that’s the worst investment. ”The head of Bridgewater Associates continued:
The only thing I would say to investors is that you don’t judge your returns or your net worth by how many dollars you have. Think of it in terms of dollars, adjusted for inflation.
Dalio went on to talk about diversification. “Diversification is very important to me,” he said, adding: “It is important to diversify your portfolio well because we know the surprises on the balance sheet.”
He said, “We also know that these asset classes will perform significantly better on average, will significantly outperform cash, and that they will move each other in ways that have to do with correlations because when things decline – when the economy subsides – then bonds will outperform stocks and so on and so on. “
The billionaire believes that cryptocurrencies like Bitcoin can help diversify portfolios. “I see crypto as a small part of it. And the message is that cash will be a problematic asset and will hold that other diversified portfolio of assets, ”he added, emphasizing:
Keep looking at it in real terms, not nominal terms. And this diversification should also be an international diversification of countries, not just asset classes, in order to have a really well diversified portfolio.
Regarding cryptocurrency, he previously admitted that he owns Bitcoin (BTC). This week he is said to have said that he also has ether (ETH). “I don’t own a lot of it,” he said without revealing what cryptos or how much he owns.
In an interview with Marketwatch last week, the founder of Bridgewater Associates said:
I’m not an expert on bitcoin, but I think it has some advantages as a small part of a portfolio.
“Bitcoin is like gold, although gold is the established blue-chip alternative to fiat money,” he continued.
Even so, Dalio warned, “Bitcoin has a number of other problems. If it poses a threat to governments, it will likely be banned in some places if it becomes relatively attractive. It may not be banned everywhere. I don’t think central banks or large institutions will have any significant amount in it. “
What do you think of Ray Dalio’s investment advice and comments on Bitcoin? Let us know in the comment section below.
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Source: Crypto News Austria