Ray Dalio, Bridgewater’s director of marketing, advises that you should be underweight to cash in order to combat inflation.

Ray Dalio is Bridgewater’s Cochairman and Chief Investment Officer. He speaks at the Skybridge Capital SALT New York conference in New York City, U.S.A, September 15, 2021. REUTERS/Brendan McDermid

HONG KONG (Reuters), 10 January 2010 – Ray Dalio, a U.S. investor, said that investors should be aware of the current inflationary climate and stop looking at cash as a secure investment.

The comments were made as major central bank around the globe have started or are planning to tighten their monetary policy to reduce rising inflation pressures. However, the Omicron coronavirus variant is a threat to the global economy outlook.

Dalio, who is the founder of Bridgewater Associates said this week at a virtual UBS Greater China Conference, “The mindset must change in which everyone looks at the returns as real terms.”

“In other words, inflation adjusted means that you want buying power. That’s what you’re trying store.”

He said, “If you hold an asset that has very low return virtually and is not volatile but loses to inflation.. you need to start looking at that and so basically underweighting or under-using this cash.”

Instead, he suggested that investors remain well-diversified in terms of geography and currency, without further explanation.

Dalio also supported China’s campaign to promote “common wealth” among its people. He explained that Chinese leaders see a cycle where the country becomes rich first, then tries to distribute opportunities more equally.

Bridgewater is a Chinese-based foreign hedge fund that has been active in China since it was registered with the Chinese authority back in 2016. It now manages more than 10 Billion Yuan ($1.57 Billion) in assets in China.

“I think that a lot of people make the mistake to think that this is like Mao’s return to communism, rather than understanding that it’s part of the evolutionary process,” said he. “I think the United States, through its own system, needs more common prosperity. Many countries do.”

($1 = 6.3722 Chinese yuan renminbi)

Reporting by XieY; Editing by Vidya Rangeanathan, Ana Nicolaci da Costa

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