Tags: Dalio | Gold | Owned | Everyone

Hedge-Fund Expert Dalio: Gold Should Be Owned by Everyone

Friday, 21 Sep 2012 01:06 PM

Everyone should have gold in his or her portfolio, said famed hedge fund manager Ray Dalio, co-chief investment officer Bridgewater Associates.

Specifically, the precious yellow metal "should be a part of everybody's portfolio to some degree, because it diversifies the portfolio," Dalio told CNBC.

"It is the alternative money," he said. "Over the long term, it's a little bit better than cash."

The Federal Reserve and other central banks have taken unprecedented steps to spur economic recoveries, including slashing interest rates and more unorthodox measures such as quantitative easing (QE), under which monetary authorities pump vast amounts of liquidity into their respective financial systems by buying assets held by banks.

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As a result, paper monies have weakened over the years and gold, a hedge to softening fiat currencies — the dollar especially — has soared.

“We have a situation now where when you have too much debt. Too much debt leads to printing of money to make it easier to service,” Dalio said, referring to QE, often described as printing money out of thin air.

“So all of those things mean that some portion [of an investment portfolio] should be in gold.”

In just over a week, the Federal Reserve and the Bank of Japan have announced fresh monetary stimulus measures, pushing gold prices to six-month highs of over $1,770 an ounce, namely due to the Fed's decision to roll out another round of QE.

The latest round of stimulus marks the third time the Fed has moved with the policy tool since 2008.

"QE3 was a bit of a game-changer for a lot of people. People are having to think seriously about where they put their money," said Ross Norman, chief executive of bullion broker Sharps Pixley, according to Reuters.

"Gold does seem to have taken on a life of its own now. We think we might see $1,800 in the next couple of weeks or so."

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Everyone should have gold in his or her portfolio, said famed hedge fund manager Ray Dalio, co-chief investment officer Bridgewater Associates.
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2012-06-21
Friday, 21 Sep 2012 01:06 PM
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