Ray Dalio’s Best Quotes on SVB, Investing, Political Wars, US Economy

  • Ray Dalio shared his thoughts on SVB, offered investing advice and warned of political conflicts last month.
  • The Bridgewater Associates founder said he thinks the next two years will be a ‘very risky time’. 
  • Here are 7 of the veteran investor’s best quotes from March. 

Billionaire investor Ray Dalio has shared his thoughts on Silicon Valley Bank’s failure, given some investing advice and warned of key geopolitical risks in his discourses across various media last month.

The Bridgewater Associates founder and investing veteran also offered up his thoughts on why he thinks the next two years will be a “very risky time”.

Here are Dalio’s 7 best quotes from a Q&A session, his March newsletter, as well as videos published last month, lightly edited for length and clarity:

Silicon Valley Bank’s failure 

“I was asked to share my thoughts about the Silicon Valley Bank situation. I want to convey that it’s very indicative of what the whole economy is like. So there’s its particular situation, and the Fed coming in and guaranteeing all depositors. But it’s a common situation. It exists pervasively.”

“I think that it is a very classic event in the very classic bubble-bursting part of the short-term debt cycle.” 

“Based on my understanding of this dynamic and what is now happening (which line up), this bank failure is a ‘canary in the coal mine’ early-sign dynamic that will have knock-on effects in the venture world and well beyond it.” 

Economic outlook 

“While people are now not thinking about the next interest-rate cut and quantitative easing of the Fed, we should because the timing of these is probably less than about a year away and that will have big effects. I think that there is a good chance that it will produce a big decline in the value of money. So, it looks likely to me that the financial/economic picture over the next year or two will be tough.” 

Investing strategies

“In my opinion we should be well-diversified. Keep in mind what I call “the holy grail” of investing, which is to have 10 to 15 good, uncoordinated return streams. Simply said: hold a well-balanced portfolio that holds both assets that do well when there are great productivity gains (equities, especially those that produce benefit from new technologies that produce leaps in productivity) and assets that do well when there is the devaluation of money.”

“Please understand that I’m not sure of anything. That’s why I believe that the key to good investing lies in achieving balance of uncorrelated good return streams so that one’s portfolio has little or no bias to go up and down as conditions get better and worse. As I have stated repeatedly, this risk reduction can be done without reducing expected returns. So that’s what I think and what I recommend doing.” 

Geopolitical risks 

“Let’s remember that [the money/credit/debt/market/economic dynamic] is being accompanied by the internal conflict dynamic (most importantly the 2024 US elections that are coming up) and the external conflict dynamic (most importantly the US-China conflict and the US-NATO-Russia conflict, though others like that with Iran are notable). All of these conflicts affect each other.”

“This setup implies to me that there is a significant risk that there will be 1) bad financial and economic conditions at a time of 2) bad internal conflict and 3) bad international conflicts—with the world being leveraged long. In a nutshell, it looks to me like the next two years will be a very risky time.” 

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