Bridgewater Associates founder Ray Dalio has recommended that neutral investment portfolios should include a 10%-15% allocation to gold to shield investors from risks arising from debt-burdened US markets, according to a report by Reuters.
Speaking at a finance event ahead of Abu Dhabi Finance Week, Dalit warned that US markets could be heading for a “heart attack” as debt servicing costs increasingly squeeze government spending, urging investors to hold gold as a portfolio hedge. He likened the US debt burden to plaque clogging arteries, cautioning that unsustainable fiscal pressures leave investors exposed.
Dalio, who sold his remaining stake in Bridgewater in July, said investors must consider “whose money you own” in an environment of record leverage and geopolitical uncertainty. Standard Chartered CEO Bill Winters, sharing the stage with Dalio, added that Europe faces similar constraints, with the UK and France under comparable fiscal stress.
Despite Dalio’s caution, equity markets remain buoyant. The S&P 500 and Nasdaq both closed at record highs this week, up more than 11% and 13% year-to-date, as softer inflation data fuelled expectations of Federal Reserve rate cuts.
