Those who are not familiar with Ray Dalio, he is the founder of Bridgewater Associates, the world’s largest hedge fund. He believes that every investor should buy some gold.
Bridgewater purchased 1,405,915 shares of the SPDR Gold Trust ETF (GLD), increasing their position by 34.66%. In 1996, Dalio created “The All-Weather Portfolio,” which could perform well regardless of the market conditions. In that portfolio, he allocated less than 7% in gold.
He allocated over 20% in gold in the current portfolio, almost three times his initial stake. So, saying that Dalio is bullish on gold a bit of an understatement.
How gold is for investment according to Ray Dalio in 2021?
Gold is far from the perfect investment said that by Ray Dalio. As its critics will tell you, gold is just a metal. Unlike property or shares of a company, it produces no yield. And with storage costs and possible insurance, it will probably actually cost you money to even hold it.
But there are still potential reasons to consider gold as a useful investment in 2021. Billionaire investor and Bridgewater Associates fund manager Ray Dalio agrees. Ray Dalio has just released an article on the matter, in which he stated the following:
The economics of investing in bonds (and most financial assets) has become stupid… Imagine that the economy is a person and government policy makers are doctors. When the economy’s pulse plunges the doctors run to inject a big dose of stimulation into it. When you see them running to the patient and injecting the giant dose of stimulation, you should buy reflation assets like stocks, inflation-indexed bonds, and gold because the response to the stimulation will initially cause these assets to rise before the stimulation passes through to the economy and the patient starts running around.
After a stellar year in 2020, gold has come off the boil in 2021 so far. Last year saw the price of gold break its 2011 record high, and brought renewed interest in the metal for its fabled ‘hedge against chaos’ properties. And This is understandable.
According to Ray Dalio Portfolio Gold; he believes that well-diversified portfolio of non-debt and non-dollar assets along with a short cash position is preferable to a traditional stock/bond mix that is heavily skewed to US dollars.
So, his recommendation seems to be that owning gold as a part of a expanded portfolio is a wise idea.