Billionaire investor Ray Dalio has outlined his recommendations for hedging against currency devaluation, focusing on gold and Bitcoin.
Asset Allocation Recommendations
Dalio suggested allocating about 15% of the portfolio to gold or Bitcoin to achieve the best return-to-risk balance. He emphasized his preference for gold but acknowledged Bitcoin's role in portfolio diversification.
Challenges of Currency Devaluation
Dalio noted that excessive money printing leads to a depreciation of purchasing power, creating risks for fiat currencies. He viewed precious metals and Bitcoin as effective hedges. 'It’s an effective hedge,' he noted.
Portfolio Diversification
Dalio highlighted the importance of reflecting personal investor convictions in asset allocation. For instance, those who trust Bitcoin more might allocate a larger share to digital assets, while gold supporters may increase their bullion share.
Dalio's advice may help investors rethink their hedging strategies against inflation and currency weakness, potentially leading to steadier long-term returns amid uncertain global economic conditions.
