Ray Dalio, founder of Bridgewater Associates: Invest in gold and Bitcoin, stay away from debt assets

On Tuesday, Ray Dalio, co-founder of Bridgewater Associates, one of the world's largest hedge funds, stated at a financial conference in Abu Dhabi that, in the context of worsening debt issues facing most major economies, he prefers to invest in "hard currencies" such as gold and Bitcoin, while avoiding debt assets:

I believe there could be issues with debt currencies. I want to avoid debt assets like bonds and other forms of debt, and hold some hard currencies like gold and Bitcoin.

Hard currencies typically refer to currencies backed by physical commodities such as gold and silver, and Bitcoin is also classified as a hard currency due to its stability and controllability in supply.

Both gold and Bitcoin have recently approached historical highs as investors seek to hedge against economic uncertainty, geopolitical tensions, and new monetary policies. Last week, driven by U.S. President-elect Trump's positive remarks on digital assets, Bitcoin broke the $100,000 mark for the first time in history.

Dalio pointed out that the debt levels of many major countries have reached "unprecedented levels," which is unsustainable. He warned that these countries will inevitably face a debt crisis in the future, leading to a significant decline in the value of their currencies.

Dalio believes that debt, currency, and the economy are one of the five key forces driving almost everything. The other four driving factors include:

• The internal political order of nations, driven by wealth and value gaps.
• The external geopolitical order.
• Natural disasters such as droughts, floods, pandemics, and climate change.
• The invention of disruptive technologies. When discussing disruptive technologies, Dalio stated that he prefers to invest in companies that use technology to improve their own businesses rather than those that sell the most products or services.

Dalio emphasized not to focus too much on the daily ups and downs of the news but to consider these larger trends more. "Think at both strategic and tactical levels, take a global perspective, and recognize that what you don't know about the future far exceeds what you do know."

He added that diversification and functionality are essential elements of an investment strategy to effectively respond to threats and seize opportunities.

In October 2022, Dalio officially stepped down from the control of Bridgewater Associates, having previously resigned as CEO and chairman in 2017 and 2021, respectively. His current role mainly involves providing guidance to the committee overseeing the company's investment strategy.

Last year, Dalio opened a branch of his family office in Abu Dhabi, UAE, aiming to expand into the Middle Eastern market composed of Gulf Cooperation Council (GCC) member states.

He praised the six member countries of the GCC—Saudi Arabia, Kuwait, the UAE, Qatar, Bahrain, and Oman—as an ideal regional investment hub, as it is a place where families can live well and children can receive a good education