Ray Dalio Recommends This Much Gold

Billionaire Ray Dalio gained respect around the world by accurately predicting the financial crisis of 2008. Now, investors often look to Dalio for investment advice, and gold is one of his favorite topics. But, just how much gold is enough? Keep reading to find out.

Building a Diversified Investment Portfolio

Dalio supports building a diversified investment portfolio. In fact, Dalio, along with many other investors, believes that focusing on just one investment commodity is extremely risky. Look no further than the Stock Market Crash of 1929. More than one millionaire lost their fortunes because they were primarily based in the stock market. With these factors in mind, Dalio recommends that between 5 and 10% of an individual’s overall investment portfolio should be gold.

Dangers of Growing Inflation

While Dalio supports gold investments in all economies, today’s inflation concerns make this type of investment even more important. Not only does inflation have the power to decrease the value of the dollar, but it can also curb consumer spending. This factor, in turn, can affect stock prices and reduce dividend payouts. Even if gold prices slip due to inflation, the rates are likely to return to normal once inflation is halted.

Physical Gold and ETF Investments

Naturally, investments in physical gold, such as gold bars, are the least risky of all gold investments. However, investing in gold-backed ETFs can be a great investment as well. In fact, Dalio just recently increased his investment in SPDR Gold Shares, one of the most popular gold-backed ETFs, by nearly 50%. Investors who want to increase their percentage of gold in their portfolio without purchasing more gold bars should consider ETF investments.

Gold vs. Bitcoin Investments

According to Dalio, investors who want to jump on the bitcoin bandwagon should do so cautiously. In fact, his recommendation is that these investments are still too risky and should only account for 1% or 2% of one’s overall portfolio. Dalio claims that when given the choice between bitcoin and gold, he would always choose gold.