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Ray Dalio of Bridgewater Associates believes that while hiding in cash is not a good idea in today’s environment, buying equity could be worse. “Of course cash is still garbage,” Dalio said on CNBC’s “Squawk Box” at the World Economic Forum in Davos on Tuesday. “You know how fast you’re losing purchasing power in cash? Equities are trashier.” The founder of the world’s largest hedge fund said that it is important to have a global and well-diversified portfolio in this market, and that real assets – physical assets such as real estate, energy and infrastructure – are where investors are best placed in an inflationary environment. Should consider leaving. “We’ve moved into an environment where assets that do well, almost like in the ’70s, are real assets. Real returns in a variety of ways are assets that are the best investment,” Dalio said. The billionaire investor said the Federal Reserve and other central banks around the world have begun to roll back their extraordinarily favorable COVID-era monetary policies, which could create imbalances in the markets. “The Federal Reserve is going to sell. Individuals are selling. Foreigners are selling and the US government is selling because it has to cover its losses,” Dalio said. “So there’s going to be a supply-demand problem. That means it creates a squeeze.” Dalio said investors have not positioned themselves well to hedge against decades of high inflation, and should look to a variety of assets, including bitcoin, to diversify their portfolios. “The world is not behaving adequately, I think, with the portion of their portfolio that should be inflation-protected assets. They are institutions and individuals,” Dalio said. “Bitcoin has been a tremendous achievement over the past 11 years. It is a small percentage of my portfolio. I think you have to look at the broader set of assets that serve that purpose.”
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Credit: www.cnbc.com /
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