From South China Morning Post: 2024-06-18 02:34:00

Billionaire investor Ray Dalio warns of escalating tensions between the US and China as the US election approaches, advising investors to diversify amidst heightened volatility. The strained yet contained rivalry poses major risks for global investors. Dalio predicts a “vicious competition” as both countries push against each other’s red lines.

Dalio’s company, Bridgewater Associates, has offloaded Chinese shares in recent months along with other global investors as the CSI 300 and Hang Seng Index tumbles. Despite the sell-off, Dalio sees opportunities in the market downturn as Chinese assets appear cheap. He believes a rally is likely once selling slows down due to unsustainable levels.

International investors, particularly in the US, are concerned about potential repercussions for investing in China amid anti-China policies gaining bipartisan support in the upcoming election. Dalio emphasizes the importance of diversification in the second largest economy, citing attractively priced assets that can balance a portfolio.

In Dalio’s opinion, exposure to any asset class or country should not exceed 10% of one’s portfolio to minimize risk across markets. Aligning with this philosophy, diversifying investments in different asset classes and countries is crucial amidst uncertain geopolitical and economic conditions.



Read more at South China Morning Post: Exclusive | Ray Dalio’s stock tip: diversify portfolios to avoid getting caught in US-China rivalry