In case you don’t know, Ray Dalio is the founder of the multi-billion dollar hedge fund Bridgewater Associates. So it makes sense that people tend to listen whenever he speaks.
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.
Do you have any questions on the video or the article? Ask below!
I believe that gold it’s iay a really good option when it comes to investment. Depreciation doesn’t affect it and one can be sure to make good return from the investment. As you are writing, Ian also trying to convince my family of the importance of this big investment. You’re right, dollar is depreciating and the price of things are going higher. Seeing a big figure like Ray Dalio talk about the gold it’s Isa big boost and I hope this can help me win them over. Great post!
Hello Henderson! That is a good thing that you are trying to convince your family to take the next step into a good investment! I do hope you win them over. I will pray for you and your family. Thank you for the encouraging comment!
To see a statement of such coming from a man like Ray Dalio, then I should be more than relaxed that I’ve taken the right decision to invest in gold IRA. Seriously, the US economy is really experiencing a downturn and if proper care is not taken and better precautions put into place, the US might end up getting into this dreadedly looming inflation. Though, I registered the gold IRA account for my retirements plan but them, with the way things are moving and the various developments popping up, I may invest more into it.
Right from time, I know cash is the worst possible asset anyone could own and as such, I try all my possible best to ensure I depart with any form of cash I have in savings unless the one for daily activities need. I will show this to some other colleagues at work. Thanks
Hello Ramos! I am glad that you have made the right decision to invest in a gold IRA and yes, it would be it a good idea to invest as much of your savings as possible into it, save the amount of cash you need for daily spending. Thank you for sharing my post! And thank you for the encouraging comment!
In my personal opinion, no human being can solve the problem of this world and Mr. Ray Dalio has no answer BUT the answer is from God who is the creator of the universe. Let’s enquire about Him. Human philosophy and intellectual cannot able to solve the problem.
Hello Johane and I completely agree! The ultimate answer to everything lies in God and HE is the One who sent His Son Jesus Christ to be the answer to the ALL the world’s problems, including the main problem of our eternal salvation. He died on the cross and rose again in 3 days to give us a way to eternal salvation through faith in Him. As you said no human philosophy and intellectualism can solve the problems of the world, but Jesus only is the solution. I thank you so much for letting me express that!
Hi! I have been carefully keeping an eye at currency depreciation indicators and there are some that we can observe in our daily life. The example you have presented of the gallon of milk has reminded me that if the devastating effects of inflation hit us, these simple indicators present in everyday life warned us. It would really be a pity if we close our eyes to them. I agree with you, and with Mr. Ray Dalio: we should add gold to our portfolio!
Hi Henry! I’m glad you agree to what I and Mr. Ray Dalio propose in this article. Thank you for the compliment about the gallon of milk example! And thank you for the encouraging comment!
Hi David
Thr biggest problem with investing in gold and other precious metals is that the price will fluctuate just as much. If the market gets saturation, let us say by a new mine being found, this could have a pronounced effect on gold prices. At least cash cannot lose value, whilst gold can. With gold the key is to buy when it is at the lowest and sell when the market has reached the peak, which is not an easy thing to do. When billionaires talk you listen but they still make mistakes. Gold I’d seen as safe but I would not put my eggs all in one basket.
With money it is best to have a diverse portfolio, to reduce your risk.
Thanks
Antonio
Hi Antonio,
I feel that your fears are misguided because you do not have the right idea about precious metals investing. First, precious metals investing is for the long-term and is not about buying when the price is low and selling when the price is high. This is the type of short-term investments you do with the stock markets and paper currencies.
Cash is a volatile paper currency and not only fluctuates in value, but is susceptible to currency depreciation as I mentioned in the article. With inflation, a gallon of milk that cost you $3.50 at the store one day can cost you $4.50 the next. We’re currently facing massive depreciation of the U.S. dollar and it is losing value every day.
Diversifying your portfolio is good, as you mentioned. However, investing in precious metals is a long-term investment. The value of precious metals goes up as the value of paper currencies and the US dollar goes down. And we are witnessing that today with all the quantitative easing (Federal Reserve printing cash from thin air) and the massive debt that the US is incurring. That is why investing in precious metals is a good option right now.
Thank you for dropping by with the comment!
Thank you for this information. Ray dalio is very knowledgeable and I would definitely listen to what he says about the economy. That makes a lot of sense that we would be entering some troubling Economic Times and the best way to protect ourselves from that would be to invest in a gold or other precious metals IRA.
Thanks for explaining everything so clearly and including these helpful quotes. I always appreciate your financial expertise.
Hello Edward! Thank you for the encouraging comment and I always appreciate your helpful feedback! I’m glad my articles are helpful to you and I look forward to you coming back to read more! Thank you again, Edward!
Diversifying ones portfolio is a wise decision to make as the saying goes “do not put all your eggs in one basket”.Ray Dalio is absolutely correct because it’s obvious that the stock market is no longer as valuable or wise of a decision as it used to be back in the days.
The idea of gold Ira is one that catches my interest and I will be happy to partake in it.
Thanks for this eye opening article and by the side I did fill in my email address in order to get the free PDF on gold.
Hello James! Yes, I know your name because you did sign up for the free PDF on gold but you have to confirm your subscription. Check in your inbox for “best IRA options” and click on confirm to get the free copy of your PDF. Thank you for the support and for the encouraging comment as well!
This is my first time hearing about hearing about IRA although I have a good knowledge about the great importance or benefits when it comes to dealing with gold. I have quite a number of friends who are currently investing in gold and from what I have read in this post, investing with IRA would be of great benefits in time of inflation. I would inform them about it. Thanks for sharing
Hello Dane! I’m glad you learned about what a gold IRA is through my website. That would be great if you can also tell your friends who do invest in gold. Thank you for the encouraging comment!
Rightly or not, gold is widely viewed as an inflation hedge a reliable measure of protection against purchasing power risk.This precious metal may not be the best option for that purpose, though. Some gold investors fail to consider its volatility as well as its opportunity cost, while others fail to anticipate storage needs and other logistical complexities of gold ownership. Thanks for this informative post. Much appreciated
Hello SeunJeremiah! Fortunately, investing in gold is worthwhile is you consider investing through a gold IRA. Your investment will always be the same as the spot price of gold and your gold will be stored in a depository you can visit yourself anytime. Thank you for dropping by and the comment!
Very insightful post, David and I agree with you. Dalio’s strategy has always been to diversify. His strategy is to invest in uncorrelated assets, and he’s talked about this in his Principles book. And probably his reasoning for putting a little faith in gold is due to the condition of the global economy. Even if there’s not much inflationary pressure at the moment, the consequences of the trade war may be imminent in the near future.
Hello Ron! Indeed, the trade wars may show dire consequences in the economy very soon and that is just one reason why it is important to invest in a gold IRA. Thank you for sharing your experience with us! I’m glad you read his book and shared with us his tip to invest in uncorrelated assets. That’s yet another reason to diversify your portfolio with a gold IRA! Thank you for dropping by and the insightful feedback you provided!