Founder of World’s Biggest Hedge Fund Says You Need to Own Gold (Video)
The founder of the world’s biggest hedge fund says every investor should own some gold.
Business Insider CEO Henry Blodget recently interviewed Ray Dalio, the founder of Bridgewater Associates.
You recommend that most portfolios should contain some gold.”
Dalio’s didn’t even hesitate.
Yeah. Of course.”
But why own gold? A lot of people claim buying gold doesn’t make any sense.
Well, first of all, the best way to structure a portfolio is to have the right kind of balance in your portfolio, and some amount of gold. Gold serves a purpose. It is first of all, a diversifier against other assets. You know, we have this risk on, risk off thing. We also have a monetary system. The Bretton Woods monetary system began after World War II, and it had the dollar as the world’s reserve currency. There’s a risk there. There’s a lot of dollar denominated debt and so on. If somebody felt they didn’t want to hold that, and so you could have exposures to that.”
“So it’s a diversifying asset that is sensible, and that’s the main reason to have gold in the portfolio, 5 to 10%.”
Peter Schiff has been talking about the risk of a dollar crash. The dollar has already dropped significantly this year, and it’s on track for its worst year since 1985. That was the beginning of a decade long bear market for the dollar. Peter says he thinks this one will be worse.
I think this one is going to be the mother of all dollar bear markets, and I think the dollar is going to fall much further than it did in any prior bear market.”
Meanwhile, Russia and China seem to be betting their monetary futures on gold. Their long-term maneuverings could seriously undermine the dominance of the US dollar and shift the world’s economic center of power from West to East.
A lot of people may poo-poo Dalio’s advice, but when you look at the economic and financial landscape, it seems like he might even be understating the importance of gold in your portfolio.
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