Ray Dalio, the big owner of hedge funds who has managed more than 160 billion US dollars, has a prediction: there may be a relatively large economic crisis in the United States and even the world in the future, if so, how should we protect our assets?
Regarding Ray Dalio's various predictions, he has three main concerns:
(1) The first is that the gap between the rich and the poor in the world is too large, which has led to very fierce political confrontation in all countries.
(2) The second is that there is not much room for the use of monetary policy, because most countries are playing the game of low interest rates or even negative interest rates, so if they encounter a big crisis again, it will be difficult for countries to continue to rely on interest rate cuts and money printing to save the economy.
(3) The third is a risk brought about by the Sino-US hegemony. Not only will there be fierce struggles between China and the United States, but the industrial chains of China and the United States will also begin to decouple, which will bring a lot of impact to the global economy.
So as an investor, how should you deal with these risks? If you think Ray Dalio's macro analysis makes sense, and you judge that there may really be a big stock market crash or recession in the future, then you can naturally dump all stocks and exchange them for cash or treasury bonds, which is the safest. But Ray Dalio is also showing that cash has no value in today's society. This is mainly because the world is now in a low interest rate environment, so the yield on your bond holdings is indeed too low and may shrink in the future.
The data shows that Bridgewater Fund disclosed that it holds more than 50% of its stock assets, but the proportion of bonds is not high. And what Ray Dalio is saying is that he recommends that individual investors invest 30% of their capital in stocks, so this actually shows that he is very optimistic about the future performance of the stock market, and although he thinks there may be a crash in the future, he should judge that the probability of such a crash is still very small in that.
Bridgewater Fund disclosed that it has a very large fund called pure alpha strategy, but its recent yield performance is very average, although it achieved a yield of 14.55% in the early stage, but its return rate is very low, the annualized return of pure alpha strategy fund, only 3.92%, and recently lost 0.58%. This proves that the economic crisis is already slowly coming. So for the average investor, if you have confidence in your stock selection ability, as well as your industry research ability, if you really have the ability to choose a good fund, you can indeed realize the dream of making money in the bear market.
