‘Hold More Gold Than…’: Billionaire Investor’s Advice As Precious Metal Surpasses $4,000
Gold futures last traded at $4,005.80 per ounce, having surged more than 50% this year amid growing concerns over rising fiscal deficits and global uncertainty.
Billionaire investor Ray Dalio said investors should consider holding a larger share of gold than usual, drawing parallels between the current economic climate and the early 1970s, according to a report by CNBC. Dalio, founder of Bridgewater Associates, suggested allocating up to 15% of investment portfolios to the precious metal, even as gold touched record levels above $4,000 an ounce.
“Gold is a very excellent diversifier in the portfolio,” CNBC reported quoting Dalio as saying on Tuesday at the Greenwich Economic Forum in Connecticut. “If you look at it just from a strategic asset allocation perspective, you would probably have something like 15% of your portfolio in gold … because it is one asset that does very well when the typical parts of the portfolio go down,” the report adding quoting Dalio
Gold futures last traded at $4,005.80 per ounce, having surged more than 50% this year amid growing concerns over rising fiscal deficits and global uncertainty. Dalio compared the present market conditions to the early 1970s, when inflation, heavy government spending and large debt burdens weakened confidence in fiat currencies and conventional assets, the report said.
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“It’s very much like the early ’70s … where do you put your money in?” the report said citing Dalio, adding, “When you are holding money and you put it in a debt instrument, and when there’s such a supply of debt and debt instruments, it’s not an effective storehold of wealth.”
Dalio’s guidance departs from standard portfolio advice, which generally recommends a 60-40 split between stocks and bonds, with alternative assets such as gold typically limited to a small portion of a portfolio due to their lack of income generation, according to the news report.
“Gold is the only asset that somebody can hold and you don’t have to depend on somebody else to pay you money for,” the report concluded quoting Dalio, highlighting its role as a hedge against monetary weakening and geopolitical risk.
The price of gold recently reached just below $4,000 an ounce, as a US government shutdown and a fall in technology shares increased demand for alternative stores of value. Bullion climbed as high as $3,992.27 an ounce before December futures in New York nudged past $4,000 for the first time on Tuesday, following a 0.6% gain in the previous session.
