Renowned Wall Street guru advised investing in raw materials and predicted “the death” of bonds

The Wall Street Guru Ray Dalio, gave the order to his employees to redirect portfolios towards raw materials for overcome the sharp decline in the bond market.

Dalio believes that investors should get out of bonds, even more so when interest rates are rising, and that they should diversify their portfolios with greater exposure to commodities. Specifically, the favorites are agricultural products, oil and metals that face supply interruptions, as explained by Bridgewater’s chief investment strategist, Rebbeca Patterson, in a recent interview with Bloomberg television.

Renowned Wall Street guru gave new tips for investing

Patterson is one of Dalio’s right-hand men and noted that in Bridgewater they are “absolutely” convinced that it is necessary to have raw materials in the portfolio.

“We don’t know if bonds, as an investment diversifier, are dead or comatose. I think they are probably in a comaPatterson assured. For this reason, Dalio’s team believes that in a diversified portfolio, raw materials must now occupy the space that was reserved for bonds.

Renowned Wall Street guru gave new tips for investing

Investment portfolio: which way to go

“For a solid portfolio, the most important thing is to evaluate the current investment strategy, if you have one. You have to make sure that the money is not all in one place,” added the investor.

In inflationary contexts such as the current one, cash is not a good idea. Instead, it’s best to build as diverse a portfolio as possible: include inflation-adjusted bonds — a move Dalio recommended over regular bonds — physical assets like gold, and digital assets like cryptocurrencies.

Dalio’s first tip: Assess your financial risks

“If you worry, you don’t have to worry. And if you don’t care, then you have to care,” Dalio says. Regardless of what happens, that’s the simple principle he recommends for addressing future crises.

worry encourages you to take a close look at your own personal risks and encourages you to take action on it. One of these risks can be, for example, the physical location where you live and work.

In his book “Principles for coping with changing world order,” Dalio includes a “Health Index” where it rates roughly a dozen nations based on 18 factors, including debt, military strength and economic output.

Dalio's first tip: Assess your financial risks

Dalio’s first tip: Assess your financial risks

It is a resource that can help entrepreneurs form strategies about where to invest. Changing states or countries is often a hassle, but Dalio says it’s worth considering in financially troubling circumstances.

Also advised measuring financial risks in inflation-adjusted terms“instead of the value of the current dollar”.

“If you have cash in a savings account, you’re probably accumulating value at a different rate than your other investments, since inflation taxes it,” he explained.

In the midst of chaotic times, he added, you need your emergency savings to be financed by a safe and well-diversified investment portfolio.

Dalio’s second tip: save and diversify your investment portfolio

For a solid portfolio, the most important thing is to evaluate the strategy current investment, if you have one. From there, you will be able to determine how many weeks you are able to survive financially if you lose your job.

Then make sure your money isn’t all in one place. “Cash is not a safe investment”Dalio highlighted last week, when inflation hit a 31-year high in the US.

Dalio's second tip: save and diversify your investment portfolio

Dalio’s second tip: save and diversify your investment portfolio

Instead, it is better to build as diverse a portfolio as possible: include inflation-indexed bonds –a move that Dalio recommended over regular bonds, physical assets like gold, and digital assets like cryptocurrencies.

In May, Dalio had confessed to CoinDesk that he personally owns a “small amount” of bitcoins, despite having spent years criticizing cryptocurrencies.

“It’s a hedging bet, made solely for the purpose of diversification. I urge those who like bitcoin, or those who like gold, not to make an all-or-nothing decision,” he said. dialogue with CNBC.

ray dalio he entered the stock market from the age of 12, when he received advice from golfers for whom he worked as a caddy.

In 1975, after earning an MBA from Harvard Business School, he launched Bridgewater from his two-bedroom apartment in New York. In 2018, she began moving her chips to make it a partnership and give employees more stake in the company.

Dalio has donated over a billion dollars to philanthropic causes. His Dalio Foundation has supported microfinance and educational projects in New York neighborhoods.

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Renowned Wall Street guru advised investing in raw materials and predicted “the death” of bonds