“We are in a flood of money and credit that is lifting most asset prices,” says Ray Dalio, founder and co-chief investment officer of Bridgewater Associates, the world’s biggest hedge fund. Indeed, with interest rates at rock bottom as they are today, “there’s no good reason that stocks couldn’t trade at 50 times earnings”.
But there’s a downside. Speaking to viewers of an “Ask Me Anything” session on social-media website Reddit last week, Dalio warns that the scale of the flood is also “threatening to the value of our money and credit”. As a result, it’s more crucial than ever to diversify. “Put your savings into a well-diversified mix of currencies, countries and asset classes so that your savings will not depreciate in value.“
Dalio, who has been writing about “the changing world order” in a series of essays posted on LinkedIn, is concerned about growing class conflict in the US and sees the next few years as crucial. “Between now and the... presidential election in 2024, we will face critical choices both domestically and internationally that will define the likelihood of having an internal and/or external existential conflict.”
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
His view on bitcoin has softened – digital currencies are “interesting... with similarities and differences to gold and other limited-supply, mobile... store holds of wealth”, he says. All the same, he still favours gold: “I have a strong preference for holding those things which central banks are going to want to hold and exchange value in when they are trying to transact”.
-
What is the 25x retirement rule and does it work?The 25x retirement rule has been around for decades but many experts question if it is a suitable strategy
-
When is the self-assessment tax return deadline?If you are self-employed, rent out a property or earn income from savings or investments, you may need to complete a self-assessment tax return. We run through the deadlines you need to know about
-
The financial crisis in UK universities – what can be done?UK universities are running out of cash and have begun to shed staff; bankruptcies look likely. What’s gone wrong, and what should be done about it?
-
'Governments are launching an assault on the independence of central banks'Opinion Say goodbye to the era of central bank orthodoxy and hello to the new era of central bank dependency, says Jeremy McKeown
-
Why investors can no longer trust traditional statistical indicatorsOpinion The statistical indicators and data investors have relied on for decades are no longer fit for purpose. It's time to move on, says Helen Thomas
-
The most likely outcome of the AI boom is a big fallOpinion Like the dotcom boom of the late 1990s, AI is not paying off – despite huge investments being made in the hope of creating AI-based wealth
-
The rise of Robin Zeng: China’s billionaire battery kingRobin Zeng, a pioneer in EV batteries, is vying with Li Ka-shing for the title of Hong Kong’s richest person. He is typical of a new kind of tycoon in China
-
How retail investors can gain exposure to Lloyd’s of LondonIt’s hard for retail investors to get in on the action at Lloyd’s of London. Here are some of the ways to gain exposure
-
The goal of business is not profit, but virtueOpinion Serve your customers well, and the profits will follow, according to a new book. It rarely works the other way around, says Stuart Watkins
-
Earnings estimates are a rigged game – especially in the USThe number of US stocks beating earnings estimates tells us only that guidance has deliberately been set too low
