Ray Dalio’s Recent Investments and Tips
Investing in stocks on the stock exchange market is considered by many finance specialists to be a great way of building wealth. The reason behind this is that the longer you let your money stay invested in a stock, the more value it adds to them because of the compound interest. For beginners or investors without experience who are looking to invest in stocks, Ray Dalio, billionaire, and investor has one piece of advice: just get started. Ray Dalio is the fund magnate of Bridgewater Associates, which is the largest hedge fund and is well-known for his investment style. He thinks that people should first play the game and then learn from the mistakes along the way.
However, starting to invest your money in stocks can be intimidating and somewhat confusing, and that’s the reason why not many people under 35 choose to invest in stocks. Plus, the stock market has its ups and downs and that makes it even more complicated to understand for young people. All these factors should not scare you away if you are looking to invest, but convince you that thorough research can go a long way. Looking up to investors like Ray Dalio is a good way to learn how and when to invest and see what you need to do to become a successful investor. The experience of Ray Dalio in investments is huge and that is the reason why you should listen when he speaks. Whether you are looking to buy or sell this year, the recent investments of Ray Dalio in 2018 may help you understand in what sectors the market will rise and give you some tips on where to park your money.
Ray Dalio’s recent investments
The billionaire has invested in many companies in his career, but the strongest assets in his portfolio are:
Bed Bath & Beyond
Devon Energy Company
Express Scripts Holding Company
Southwestern Energy Company
Chesapeake Energy Corporation
He continues to invest in these stocks in 2018 as well and you should follow his lead and, at least, look for similar companies to invest in. In addition, Ray Dalio also has undervalued holdings in his portfolio which perform very good. If you are looking to invest, check out these stocks:
Yamana Gold Inc.
Tahoe Resources Inc.
United Continental Holdings Inc.
Southwestern Energy Company
Sibanye Gold Limited
Range Resources Corporation
His recent investments also include stocks similar to these. However, remember that the stock portfolio of Ray Dalio is quite diverse. The billionaire has always shared valuable life and business lessons to his audience, and his tips can help you start investing.
Ray Dalio’s investment tips
Here are a few tips from Ray Dalio to take into consideration while investing.
1. Construct your portfolio
Ray Dalio believes that investing is about constructing your portfolio. It’s not about the products or the procedure but about building a portfolio that maximizes the results with minimum risk in market conditions. That’s why for him it’s not really about which stock is going to perform better in the first quarter or which stock to sell in the next quarter, but about a portfolio that sustains the activity in all conditions of the market. The best advice from Ray Dalio is to focus on constructing a portfolio because, without a plan, products or procedures will be hectic and you won’t be able to get profit on a long term.
2. How to balance your portfolio
Ray thinks balanced portfolios are the best for investors and that’s why he encourages them to build a strategy for this. He believes that a balanced portfolio is not made of 50:50 bonds and stocks because he thinks stocks come with a higher risk. A balanced portfolio model for Ray Dalio is:
- 15% intermediate bonds (low yield, short tenure)
- 40% long-term bonds (high yield, long tenure)
- 30% stocks (which are riskier)
- 5% gold
- 5% commodities
This is just an example of how a balanced portfolio may look like for an investor, which means it could be adapted to your own plan and strategy. Ray is known as a conservative investor. He survived through 1973 at the New York Stock Exchange, when the oil shock caused high volatility of the stock market in the US and then came the Gold Rush in the 70s. These market uncertainties made Ray Dalio an investor who likes to think before acting and he is almost obsessed with risk management.
This experience of Ray and the effects it had on his investment strategy and discourse should be taken into consideration if you’re a young investor. When you are just entering the market, it can be overwhelming and you may lose your money quickly due to the bidding fever. However, with a conservative example like Ray Dalio, a beginner investor can make better choices.
3. Forget about timing
Ray Dalio is also known for his opinion that investors shouldn’t be timing the market. He says that timing the market is like playing poker with some of the best players worldwide that have unlimited resources. This is a game only a few will win it. Therefore, a young, beginner investor wouldn’t want to be caught in that game. He thinks that you shouldn’t attempt to time the market, but research well and invest carefully by building a balanced portfolio.
There are many things to learn from Ray Dalio as an investor. The man is a self-made billionaire who manages almost $160 billion in hedge funds for more than 300 global clients. He manages different types of investment instruments such as pension funds, charitable foundations, central banks, sovereign wealth funds or endowments for well-known universities. Ray Dalio is number 67 on Forbes list of billionaires around the world and has a fortune of over $17 billion. Therefore, if you are a young investor and want to enter the market, listening to Ray Dalio’s investing advice is the smartest thing to do. He is one of the most conservative investors out there and has been through many times of market uncertainty and knows that investing smartly is investing with minimum risk for a long period of time.