Ray Dalio: Markets Remind of the ’70s – Time for More Gold

The founder of Bridgewater Associates, Ray Dalio, stated that investors should allocate up to 15% of their portfolios to gold, even as the precious metal reached a new all-time high above $4,000 per ounce.

“Gold is an excellent diversifier in the portfolio,” Dalio said on Tuesday during the Greenwich Economic Forum in Connecticut. “From a purely strategic asset allocation perspective, you would probably want around 15% of your portfolio in gold because it is an asset that performs very well when the typical parts of the portfolio decline.”

Gold futures were last trading at $4,005.80 per ounce. Prices have risen more than 50% since the beginning of the year, as investors seek safety amid rising budget deficits and global tensions.

The billionaire investor compared today’s environment to the early 1970s, when inflation, high government spending, and massive debt undermined confidence in paper assets and fiat currencies.

“It very much resembles the early ’70s… where do you put your money?” he said. “When you hold cash and invest it in a debt instrument, and with so much supply of debt and bonds, it’s no longer an effective store of wealth.”

Dalio’s recommendations contrast with the traditional investment strategy advised by financial planners, who typically suggest 60% stocks and 40% bonds. Alternative assets like gold and other commodities usually occupy a single-digit share of a portfolio since they do not generate income.

DoubleLine Capital CEO Jeffrey Gundlach also recently recommended a higher weighting in gold—up to 25% of the portfolio—believing that the metal will continue to stand out due to inflationary pressures and a weakening dollar.

Dalio emphasized that gold is unique as a hedge against monetary debasement and geopolitical uncertainty.

“Gold is the only asset you can hold without relying on someone else to pay you,” he said.