![]() ![]() He selects assets that have little or no correlation, without sacrificing returns. Though on the surface this strategy appears counter-intuitive, Dalio has made it work. The “Holy Grail” of investing, according to Dalio, is diversifying your portfolio in a manner that reduces risk without impacting returns. The safer asset classes, can’t generate the sort of income that stocks do, and they don’t increase in value at the same rate. The problem with this method of diversification is that it can impact returns. Those who are comfortable with a high-risk/high-reward strategy focus on the equity side, while investors who need more stability increase their bond and cash holdings. For example, there might be a mix of stocks, bonds, and cash. Traditional diversification focuses on protecting returns through the purchase of assets in different classes. ![]() How Ray Dalio Thinks About Diversificationĭalio credits much of his success to a unique method of portfolio construction – one he developed after some painful lessons about diversification during his early years of investing. Through his foundation, Dalio Philanthropies, the billionaire works to give others an opportunity to pursue their own version of the American Dream. He is active in a wide variety of philanthropic causes, with a special focus on microfinance and inner-city education. Today, Bridgewater Associates manages $160 billion in assets, and Dalio has an estimated net worth of approximately $18.7 billion.ĭespite accruing wealth beyond his wildest imagination Dalio hasn’t forgotten his roots. He launched Bridgewater Associates from his two-bedroom apartment, and in the 40 years that followed, he grew his company to be the largest hedge fund firm in the world. Even then, he had an eye on the stock market, and he collected stock tips from his golfer clients along with the cash.ĭalio started investing that year, and by 1975, he was ready to enter the big leagues. ![]() He started working as soon as he could, collecting tips as a golf caddy when he was just 12 years old. As a child, he and his family lived in a middle-class neighborhood on Long Island. Ray Dalio Holy Grail Explained: Ray Dalio’s success is the type of story that drives the American Dream. ![]()
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