Diversification is Key for New Investors, Says Billionaire Ray Dalio
Renowned billionaire investor Ray Dalio advises new investors to have a diversified portfolio in light of ongoing economic and geopolitical challenges.
In a recent speech at the Milken Institute Asia Summit in Singapore, Dalio, the founder of Bridgewater Associates, one of the world’s largest hedge funds, emphasized the importance of diversification. He stated, “I would like to have diversification, because what I don’t know is going to be much greater than what I do know.”
Dalio further explained that diversification can help reduce risk without significantly diminishing potential returns if done correctly. He urged investors to pay attention to the implications of the significant disruptions that will occur in the coming years, as the world is expected to undergo radical changes.
“It’s like going through a time warp. We’re going to be in a different world. And the disruptors will be disrupted.”
Ray Dalio
Founder, Bridgewater Associates
Dalio also expressed interest in the evolution of artificial intelligence. However, he recommended investing in companies that adopt this new technology rather than those creating it. He stated, “I don’t need to pick those who are creating the new technologies. I need to really pick those who are using the new technologies in the best possible way.”
Asia, an ‘Exciting Region’
Dalio spoke highly of Singapore, describing it as a “very special place” in an exciting region. He noted that the world landscape and order are changing, and Singapore’s position as a hub makes it an excellent place to be.
When asked about the growing number of family offices being set up in Singapore, Dalio shared the three most important factors to consider when choosing a country to invest in. He emphasized the importance of a country having a strong income statement and balance sheet, a civil environment where people work together to achieve positive outcomes, and the country’s stance in international conflicts.
Dalio also highlighted a common mistake made by investors, cautioning against assuming that markets that have performed well in the past will continue to be good investments, as they may already be overpriced.