Ray Dalio Advocates for Strategic Portfolio Allocation
In a notable discussion on the “Master Investor” podcast, billionaire investor Ray Dalio advocated for a strategic portfolio allocation of 15% in either Bitcoin or gold, speaking with CNBC contributor Wilfred Frost. Dalio suggested that for an individual looking to optimize their investments without a predetermined bias, diversifying into these assets is prudent.
“If you weren’t leaning toward any specific view, you would ideally set around 15% of your investment portfolio in gold or Bitcoin,”
he explained.
Dalio’s Preference and Concerns
While emphasizing his preference for gold over Bitcoin, Dalio left the ultimate decision to investors regarding their asset allocations. The founder of Bridgewater Associates revealed that he still possesses a fraction of Bitcoin, having entered the market back in May 2021. He acknowledged Bitcoin’s capped supply and transaction efficiencies, which contribute to its perception as a form of money by some.
However, Dalio expressed skepticism regarding Bitcoin’s acceptance by central banks as a reserve currency, primarily due to its lack of privacy features. He also raised concerns over the technology underlying Bitcoin, questioning its security and potential vulnerabilities.
“There is a question of whether the code could be broken or whether interventions, such as government regulation, could undermine its effectiveness,”
Dalio stated.
Economic Trends and Investor Reactions
This commentary comes amid his warnings about the alarming growth of U.S. debt, which he claims has ballooned to six times the annual revenue. He highlighted that the U.S. is projected to issue about $12 trillion in debt over the coming year, emphasizing the critical nature of these economic trends. Following Dalio’s remarks, several Bitcoin advocates encouraged investors to increase their holdings of the cryptocurrency, particularly in light of the recent fiscal policies stemming from the recently passed tax and spending legislation.
