Ray Dalio Summit Speech | Prefers Cash Over Bonds, Should Focus on Companies Using AI Technology

Ray Dalio, founder of Bridgewater Associates, recently attended the Milken Institute Asia Summit in Singapore. In addition to discussing global macroeconomics, he emphasized the importance of focusing on investing in companies that adopt new AI technologies rather than the inventors of such technologies.

Ray Dalio: Prefers Cash Over Bonds

According to CNBC report, Ray Dalio has expressed his reluctance to hold assets such as bonds, stating that holding cash is a good option at the moment with good interest rates, although this situation may not last indefinitely.

At the time of Dalio's statement, the U.S. 30-year Treasury bond had risen to 5%, and high-yield savings accounts offered rates of 4%. He mentioned:

When investors sell off bonds causing interest rates to rise, central banks must decide whether to allow rates to rise and bear the consequences, or to print money to buy bonds? The latter would also lead to inflation. We are now seeing a similar situation, and I personally believe long-term bonds are not a good investment.

Dalio's views sharply contrast with the actions of Warren Buffett, who under Berkshire Hathaway, bought $10 billion in U.S. bonds at the end of July and completely disregarded the downgrade of the U.S. credit rating by Fitch.

Buffett stated that there are things that people do not need to worry about, and the downgrade of the U.S. credit rating is one of them.

Focus on Investing in Companies "Adopting" AI

Ray Dalio advised investors to invest in companies that adopt new technologies such as AI, rather than companies creating innovative technologies.

He said:

The world will undergo huge changes in five years, and the situation will be completely different every year. Those disruptors who overturn the status quo will be disrupted. Therefore, I do not need people who create new technologies; what I really need to screen for are those who adopt new technologies in the best way.

As Ray Dalio mentioned the imminent major changes in the world, he also praised Singapore as a hub of the world, a great place.

Three Key Points on Whether a Country is Worth Investing In

Ray Dalio was asked about the increasing number of family offices being set up in Singapore and his views on this matter. He believes there are three key factors in selecting a country:

• A civilized environment

• A good balance sheet

• People with a spirit of co-creation

He added that the country's stance during international conflicts is also an important factor to consider.

Ray Dalio Reiterates the Importance of Diversified Investments

Ray Dalio believes that due to ongoing economic and geopolitical risks, new investors should have a diversified investment portfolio.

He stated:

Because there is far more that I don't know than I do know, I would like to achieve diversified investments, which can reduce drawdown risk without significantly reducing asset holdings.

He emphasized that the biggest mistake investors often make is "believing that a well-performing market or stock is a good investment," without considering whether the price is already at a high valuation.