Bridgewater Associates’ Ray Dalio on stage at CNBC’s CONVERGE LIVE in March.
Courtesy of CNBC
Bridgewater Associates founder Ray Dalio mentioned traders ought to allocate as a lot as 15% of their portfolios to gold whilst the valuable metallic surged to an all-time excessive above $4,000 an oz..
“Gold is a really glorious diversifier within the portfolio,” Dalio mentioned Tuesday on the Greenwich Financial Discussion board in Greenwich, Connecticut. “Should you take a look at it simply from a strategic asset allocation perspective, you’d most likely have one thing like 15% of your portfolio in gold … as a result of it’s one asset that does very effectively when the standard components of the portfolio go down.”
Gold futures 12 months to this point
Gold futures have been final buying and selling at $4,005.80 per ounce. Costs have skyrocketed greater than 50% this 12 months amid a flight to security amid mounting fiscal deficits and rising international tensions.
The billionaire investor in contrast right this moment’s setting to the early Seventies, when inflation, heavy authorities spending and excessive debt masses eroded confidence in paper belongings and fiat currencies.
“It’s totally very like the early ’70s…the place do you set your cash in?” he mentioned. “If you find yourself holding cash and you set it in a debt instrument, and when there’s such a provide of debt and debt devices, it isn’t an efficient storehold of wealth.”
Dalio’s advice contrasts with typical portfolio suggestions of economic advisors which inform purchasers to carry principally shares and a few bonds in a 60-40 cut up. Various belongings like gold and different commodities are normally advised to be a low single-digit proportion of any portfolio due to the dearth of revenue they generate.
DoubleLine Capital CEO Jeffrey Gundlach additionally just lately beneficial a excessive weighting in gold — as a lot as 25% within the portfolio — as he believes gold will proceed to face out on the again of inflationary pressures and a weaker greenback.
Dalio mentioned gold stands aside as a hedge in occasions of financial debasement and geopolitical uncertainty.
“Gold is the one asset that anyone can maintain and you do not have to rely on anyone else to pay your cash for,” he mentioned.
