Shortly before he announced his retirement from hedge fund Bridgewater Associates yesterday morning, Ray Dalio had a change of mind. He tweeted that he no longer thinks that “cash is trash,” after referencing a John Maynard Keynes quote.
The founder of the world’s largest hedge fund noted that while it’s still “neither a very good or very bad deal,” the short-term interest rate is “now about right.”
Dalio is famously known for warning people against holding cash. He has, for years, urged investors to diversify their portfolios.
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In an interview with CNBC Tuesday at the Davos World Economic Forum in May, he urged people to stay away from cash and stocks and recommended “real-return assets” as the best investments.
“Of course, cash is still trash,” the billionaire investor said. “[Do] you know how fast you’re losing buying power?”
Dalio’s U-turn indicates a huge change in the markets. Citigroup said last month that the US dollar, which has had a remarkable performance in 2022, is the only asset investors could use as a hedge against recession this year.
The dollar index has gained around 16% this year, shattering 20-year records. Analysts say that it’s likely to remain strong for the rest of the year.
Information for this briefing was found via Twitter, Fortune, and Bloomberg, and the sources and companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
