Gold prices fluctuate strongly, billionaire gives advice to investors

Bridgewater Associates founder billionaire Ray Dalio believes that gold is not just a speculative asset but a platform currency - a currency that has truly held its value throughout history.

According to him, investors should hold between 5% and 15% of their portfolios in gold, and even more during wartime or when the legal precedent is depreciated.

There is no denying that gold is money and is the type of money that is at the risk of being depreciated or having its value confiscated the most, Dalio wrote in a post on Thursday.

Dalio believes that historically, every currency has been classified as one of two types: either secured by finite assets such as gold or silver, or legal tender - that is, not guaranteed by anything, so the supply can be unlimited.

According to him, every time the monetary system associated with gold accumulates too many debts, it always collapses. At that time, the leaders either resolutely kept their commitment to convert gold, leading to bankruptcy and recession, or broke their commitment to print more money, causing money to depreciate and gold to increase sharply.

Before the birth of central banks - such as the US Federal Reserve (FED) in 1913 - economies often chose the bearish path. But since the central bank's rise, the inflation path has been prioritized, with the overall outcome being currency and debt crises, which have only been resolved once prices have risen to new levels.

Since 1971, when the global monetary system completely shifted to the legal thuc, lessons from the past have become even more noteworthy.

At every stage when central banks create too much money and credit, inflation increases and gold prices increase accordingly. Over the long term, gold has always been the currency with the best purchasing power. That is why gold has become the second largest reserve currency of central banks today, after the USD, said Dalio.

According to Dalio, one of the important advantages of gold is the risk of being confiscated much lower than other currencies. Gold does not depend on anyone's debt repayment obligations and is also difficult for the government to seize. Gold is the most difficult type of money to misappropriate, because it can be stored safely, regardless of payment system or technology. Gold cannot be stolen online," he wrote.

Dalio asserted that he sees gold as part of a long-term asset allocation strategy, not a short-term speculative tool. I value gold like any other asset based on expectations, risks, correlation and liquidity.

The proportion of gold in a portfolio needs to be determined based on the characteristics of other assets and each person's risk tolerance," he wrote.

He said that the majority of investors today see gold as a speculative market, rather than seeing it as a strategic component of a portfolio.

Those who are unable to predict the market should keep a fixed gold ratio. According to my analysis, the reasonable level is from 5% to 15%, depending on the portfolio structure and risk appetite. During times of monetary crisis, the risk of asset seizure or economic war, this proportion should be increased. Conversely, when things are stable, they can ease because in the long term, gold is not a profitable asset - like cash - Dalio recommended.

Dalio stressed that investors should view gold as a platform currency in their portfolios. He said that holding a share of gold is necessary to preserve the value of assets in the long term, especially in the context that many people currently have absolutely no gold in their portfolios.