Ray Dalio reveals stellar profits for his Pure Alpha fund which is up 25% year to date.
Ray Dalio’s Bridgewater has bucked the bearish financial market trend in 2022 which has seen all asset classes stocks, bonds, and cryptos down significantly in the first half of 2022. Most investors are nursing sizable losses.
Pure Alpha is Bridgewater’s optimal alpha portfolio, which it has been managing since 1991. It is a global, active investment strategy designed to generate high and consistent returns by hedging investments in assets that are uncorrelated.
“lpha fund which is up 25% year to date”
Dalio reveals stellar profits in a climate of caution
Ray Dalio said the US is suffering from the worst political polarization in more than a century — and that the U.S. is even more polarized today than it was during the Civil Rights era of the 1960s.
Ray Dalio warned that the US is facing “the largest amount of internal conflict since about 1900. Even more than the German ’30s,” he said in his recent interview.
In a backdrop of deteriorating domestic politics Dalio reveals stellar profits
Asked to elaborate on the metrics he uses, Dalio pointed to the growing wealth gap, as well as polarization separating Democratic and Republican voters.
“The Republicans are more conservative than they have ever been, and the Democrats are more liberal,” he said.
“The voting across party lines is the lowest it has been since 1900,” he added.
“You have the largest wealth gap that’s existed…you have a big internal debate over practically everything,” he said.
“The voting across party lines is the lowest it has been since 1900”
It’s possible that both parties might not accept the results of the next U.S. presidential election in 2024, similar to how former President Donald Trump insisted that President Joe Biden had “stolen” the election in 2020.
“It’s an ideological conflict,” Dalio said.
Ray Dalio is concerned that a US recession could aggravate this divide.
“If you have a bad set of economic circumstances, people get angry. And they should since some of them are suffering,” Dalio said.
There’s also the concern that growing tensions between the U.S. and China could add to the economic hardship in the U.S., and potentially beyond.
“Twenty-two percent of all manufactured goods and imports come from China,” Dalio said.
“If you were in a situation where China was like Russia, in other words, it’s not cool to invest or produce there, that economic impact would be enormous,” Dalio said.
“The most important thing that you can do is have a well-balanced portfolio” – Ray Dalio
The key to Dalio reveals stellar profit performance is diversification
“We are in a period where most of the assets are going down,” Dalio said.
“The most important thing that you can do is have a well-balanced portfolio,” he said. Instead of trying to time the market, investors should focus on diversification, he said.
He also recommended that retail investors evaluate the soundness of their investments in real terms. For example, it would probably make more sense to buy inflation-indexed bonds instead of nominal bonds right now.
“The biggest problem most retail investors have is that they think when something goes up a lot, it’s a good investment — and not that it’s more expensive,” he said.