The interesting thing is Ray Dalio has much to say about investing in a gold IRA as a hedge against inflation. In fact, he believes a major financial crisis is looming large and a precious metals IRA is the best way to protect your portfolio from future financial hardship.
Besides inflation, Dalio has openly shared other reasons why a gold IRA is great investment idea. We’ll touch upon them and focus on the inflationary aspects of his thinking.
In the end, you can decide if this billionaire investor is a crackpot of a genius.
Either way, massive inflation is going to affect your portfolio one way or another. Will you be prepared? Or will you remain scared and miss this detrimental opportunity to save your financial wellbeing? It’s your call.
Are Low Interest Rates and Quantitative Easing about to End?
No one really knows what the Fed is going to do. But some very rich and successful investors have made lots of money predicting their moves. This brings us to Ray Dalio, billionaire investor and founder of Bridgewater.
Recently, Dalio spoke his mind on the topic. His main belief is that the Fed is squashing quantitative easing and low interest rates. He feels a new market paradigm is about to get underway.
Why does he feel this way? One reason is capitalists and socialists are continuously going up against one another. And this is especially true with Donald Trump at the helm of the United States. The divide between liberals and conservatives has never been greater. And because of this divide, the US economy will continue to suffer.
But Ray Dalio has the answer to protecting your portfolio from the stress and strife caused by US politicians and political divide. The answer is gold.
His feelings on the topic are very simple to follow if you pay attention. He feels confident that investing in a gold IRA has two-fold benefits. First, it will reduce your risk and exposure to inflation. Second, it will give investors an opportunity to make solid returns on their investment. Anyone paying attention can see that gold prices are on the move and it doesn’t look like they’ll slow down anytime soon.
In his own words Dalio stated, “I believe it would be both risk-reducing and return-enhancing to consider adding gold to one’s portfolio.”
The Trouble with Debt Monetization and Currency Depreciation
Ray Dalio also recognizes two other key areas where our financial system can run into major trouble. He sees that major monetary price swings are taking place. The swings help either creditors or debtors, but they tend to happen at the expense of one another. So if the creditors receive help, it happens at the debtor’s expense. And if the debtor’s get additional help, this comes at the expense of creditors.
According to Dalio, these major pendulum swings will create problems in two specific areas. They include:
As far as currency depreciation is concerned, your money is worth less and less each time the dollar is devalued. As an example, you can go to the grocery store and buy a gallon of milk for $3.50 right now. But if the US dollar continues to lose value, you’ll eventually have to spend more money. Next week it might cost $4.50 to buy the same gallon of milk.
How do you protect yourself from currency depreciation? There’s a fairly easy fix believe it or not. You can open a gold IRA and begin investing in precious metals like gold, silver, platinum, and palladium.
This physical currency is the best way to hedge against a falling US dollar due to inflation. Gold is currency accepted all around the world and as the dollar falters it tends to gain in value.
So if you haven’t already, consider investing in a precious metals IRA. Even if you only invest 5% to 10% of your portfolio, you’ll minimize some of your exposure to the potential devastating effects of inflation.
The Problems Facing Investors Under the Current Economic Outlook
Recently, hedge fund guru Ray Dalio sat down for a discussion with Allison Nathan, the managing director of Goldman Sachs. During this conversation he spoke about the current economic outlook. He also spoke about how it will have an impact on investors. In particular, he mentioned the risk exposure of investors being a big red flag.
Dalio said in his own words “I think investors today are mostly leveraged long, meaning they own risky assets and have substantially leveraged those assets through company buybacks, private equity, and so on. In order to diversify against this – i.e. reduce exposure to leveraged long portfolios – investors should look to other stores of wealth in areas that have intrinsic diversification.”
This insight from Dalio has plenty of truth to it. If you continue to invest heavily in the stock market and fail to diversify your portfolio, you’re left open to potential economic turmoil. It’s best to think about investing in other asset classes like a gold IRA.
Why? Simply put, Dalio believes that a paradigm shift is underway. He believes that safe stock market investments are about to run into major trouble. He isn’t necessarily calling for a stock market crash, but he’s preparing for the worst. This is why he recently added more gold to his portfolio.
Is Cash Really King?
According to Dalio, cash is far from king. In fact, he’s stated his feelings plain and simple. He said, “People seem to think that going to cash reduces risk. But that’s only the case from a standard deviation perspective. When interest rates are negligible – below the inflation rate nominal GDP growth – and you pay taxes on that, you’re not getting any return. Cash over the long run is the worst-performing asset class and therefore the riskiest asset class.”
Do you think cash is safe? Ray Dalio certainly doesn’t think so. Even worse, he believes that major economic disaster is on the horizon.
Are you ready to finally protect your financial future? It’s time to invest in a gold IRA right now. Don’t delay because the longer you wait, the longer you’re exposed to inflation, a failing US dollar, and a shaky economy. Act now before it’s too late.
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