When Ray Dalio—founder of Bridgewater Associates, the world’s most successful hedge fund, which manages over $160 billion in assets for large financial institutions, governments, and central banks—wrote last year to sell stocks and buy gold, the financial industry was shaken, and the price of gold literally took off.
Then, in November 2019—before the coronavirus emerged—Dalio placed a $1.5 billion bet the markets would crash by March 2020, which again took the financial markets by surprise. But Dalio did one more thing: On his quest to help educate the masses and explain his negative outlook on stocks, an asset he built his fortunes on, he wrote a long article to explain the underlying issues that, according to Dalio, would make gold the “asset of the decade.”
The underlying issues were already there, just waiting to be triggered by an event that would shake the financial system. And here we have it: COVID-19. As fear is spreading across the world, financial markets are dropping, and central banks are scrambling to save the paper assets they inflated for over 10 years. But this time, it just won’t work. Yesterday, the Fed pumped $1.5 trillion dollars into the market, but it kept dropping. As the real effects of the virus will unfold over the next few months, the real issues in our global economy will be unveiled.
We think Dalio’s original article is more relevant today than ever because now we have the trigger that was missing when we published the article for the first time. In his article, Dalio urged investors to sell stocks and buy gold. He was right about selling stocks. How long are you going to wait on the sideline to see if he was also right about buying gold?
Read Ray Dalio’s article at ZeroHedge: Ray Dalio Warns A “New Paradigm” Is Coming: “Buy Gold, Sell Stocks”