Ray Dalio, one of the smartest hedge fund managers, said that any investor should have some gold in their portfolio. Moreover, he said this:
“If you don’t own gold […] there is no sensible reason other than you don’t know history or you don’t know the economics of it.”
The rationale behind Dalio’s view on gold is that the yellow metal is an alternative to cash. Right now, we have a fiat money system. With central banks printing huge amounts of money into the economy, there might be a monetary crisis. And gold is a better alternative to holding cash.
Ray Dalio’s view on gold is drastically different from another billionaire investor, Warren Buffett. The Oracle of Omaha believes that gold has no utility and hence no value. When asked about Buffett’s view on gold, Ray Dalio responded,
“I think he’s making a big mistake. […] Money can be produced. Gold is somewhat limited. Gold is an alternative that should be a part of everyone’s portfolio but not in a big way. ”
Dalio’s investment strategy reflects his bullish view on gold. Inside his hedge fund Bridgewater Associates, he owns Barrick Gold Corporation (NYSE/ABX), Goldcorp Inc. (NYSE/GG), and Silver Wheaton Corp. (NYSE/SLW). If gold proves its value like Dalio foresees, investors can expect to see an epic rally in gold and related investments.