Wall Street does ‘Heart attack’ achieve valuations? Why Ray Dalio sees gold as an attractive bet

Ray Dalio, founder of Bridgewater Associates, has warned that American markets are confronted with increasing risks such as federal expenditures for the increase in debts. Speaking for the Abu Dhabi Finance Week, Dalio compared the situation with the human bloodstream: debt accumulation squeezes other forms of expenses, builds up as a plaque in arteries.

“A doctor would warn about a heart attack,” he said, who underlined the urgency of the risk.

Dalio advised investors to include gold in their portfolios as partial protection against systemic stress. “A well -diversified portfolio should be in gold somewhere between 10% and 15%,” he advised. He emphasized that the value of Gold tends to rise in particular in crisis scenarios – when most other activa classes lose value.

With global debt levels swelling and geopolitical tensions escalate, Dalio suggested that investors also wonder: “Whose money do you have?” When structuring what he called a neutral portfolio.

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On the same panel, Standard Chartered CEO Bill Winters noted that although valuations in Europe are not as elevated as those in the US, the underlying circumstances are comparable. “The UK and France are in similar situations, but markets offer more serious limitations than the US,” he said. Dalio’s comments come against the background of strong performance in US stock markets this year – both the S&P 500 and Nasdaq have won more than 11% and 13% respectively. Recent inflation numbers, cooler than expected, have also stimulated the hope that the US will soon start the Federal Reserve to lower interest rates.(Disclaimer: recommendations, suggestions, views and opinions of the experts are their own. These do not represent the views of economic times)