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Ray Dalio Says Bridgewater ‘Pure Alpha’ Fund Is Up 25% This Year

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By Joseph Adinolfi

Dalio also said the US is suffering from the worst political polarization in more than a century

Ray Dalio, the founder of Bridgewater Associates, said Wednesday that the US is suffering from its worst political polarization in more than a century — and that the US is even more polarized today than it was during the civil rights era of the 1960s.

He also revealed that Bridgewater’s Pure Alpha fund is up 25% year-to-date, slightly lower than the 32% gain to June reported by Bloomberg News earlier this year, but still significantly higher than the year-to-date. to date return of the S&P 500 SPX.

During an interview with Mark DeCambre, editor-in-chief of MarketWatch, which kicked off the inaugural MarketWatch “Best New Ideas in Money” festival, Dalio said the US is facing “the greatest amount of internal conflict since about 1900. Even more than the German 1930s,” he said.

Asked to elaborate on the statistics he uses, Dalio pointed to the growing wealth gap, as well as polarization between Democratic and Republican voters.

See: Ray Dalio says stocks, bonds should fall further, sees US recession coming in 2023 or 2024

“The Republicans are more conservative than ever, and the Democrats are more liberal,” Dalio said.

“Voting across party lines is the lowest since 1900,” Dalio added.

“You have the biggest wealth gap there has been… you have a big internal debate about practically everything,” he said.

Both parties may not accept the results of the next US presidential election in 2024, similar to how former President Donald Trump insisted that President Joe Biden “stole” the 2020 election.

“It’s an ideological conflict,” Dalio said.

And he is concerned that a recession in the US could widen this gap.

“When you have a bad economic situation, people get angry. And they should, as some of them suffer,” Dalio said.

There is also concern that rising tensions between the US and China could exacerbate economic problems in the US, and possibly beyond.

“Twenty-two percent of all manufactured goods and imports come from China,” Dalio said.

“If you were in a situation where China was like Russia, in other words it’s not cool to invest or produce there, that economic impact would be huge,” Dalio said.

Dalio returned to talking about financial markets and offered some advice for retail investors.

“We are in a period where most assets are declining,” Dalio said. ]

“The most important thing you can do is have a well-balanced portfolio,” he said. Rather than trying to time the market, investors should focus on diversification, he said.

He also recommended that private investors evaluate the soundness of their investments in real terms. For example, it would probably make more sense to buy inflation-indexed bonds now rather than nominal bonds.

“The biggest problem with most retail investors is that they think if the sothing goes up a lot, it’s a good investment — not that it’s more expensive,” he said.

When the conversation with DeCambre ended, the editor-in-chief of MarketWatch asked Dalio how well his company’s investments were doing.

Gain insight into investing and managing your finances. Speakers include investors Josh Brown and Vivek Ramaswamy; plus topics like ESG investing, EVs, aerospace and fintech. The Best New Ideas in Money Festival continues on Thursday. Sign up to participate in person or virtually

-Joseph Adinolfic

 

(END) Dow Jones Newswires

21-09-22 1727ET

Copyright (c) 2022 Dow Jones & Company, Inc.

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