Head Of World’s Largest Hedge Fund Says ‘Paradigm Shift’ In Markets Make Gold A Top Investment

Billionaire Ray Dalio has made the case for investing in gold as interest rates continue to fall and central banks print more money, resulting in devalued currencies.

In a recent LinkedIn post, the founder of Bridgewater Associates wrote about monetary policy and the markets over the last 50 years.  He said investors have been over-investing in stocks and other equity-like assets that will most likely see diminishing returns.

“The world is leveraged long, holding assets that have low real and nominal expected returns that are also providing historically low returns relative to cash returns. I think these are unlikely to be good real-returning investments.”

He also cited historical shifts in the geopolitical and macroeconomic climate, such as in the Great Depression and World Wars, to explain the coming “paradigm shift” that will soon face the economy.  He said the financial crisis was the last major “paradigm shift” and blamed unsustainable growth rates as a root cause.

Dalio said the best investments are those that “do well when the value of money is being depreciated and domestic and international conflicts are significant, such as gold.”  He said that it may be “risk-reducing and return-enhancing” for investors to add the precious metal to their portfolio. “In paradigm shifts, most people get caught overextended doing something overly popular and get really hurt,” he wrote. “On the other hand, if you’re astute enough to understand these shifts, you can navigate them well or at least protect yourself against them.”