Ray Dalio Urges Investors to Reduce Bonds and Hold Up to 15% in Gold as Debt Risks Grow

Billionaire investor Ray Dalio said investors should reduce their bond holdings and consider putting as much as 15% of their portfolios in gold to hedge against the risk of a US debt crisis that he warns could emerge within about three years, Ye Xie reported for Bloomberg .

Billionaire investor Ray Dalio is warning of rising US debt risks and urging investors to reduce bond exposure while increasing allocations to gold and some Bitcoin.

In a LinkedIn post on Friday, the Bridgewater Associates founder said investors should diversify across asset classes and countries with strong financial positions.

He recommended underweighting bonds and holding about 10% to 15% of a portfolio in gold, along with “a bit” of Bitcoin. Dalio said such diversification could reduce risk while potentially improving returns. 

Dalio has long warned about the risks posed by rising government debt.

His latest comments come as long-term US Treasury yields have climbed to multiyear highs and investors have grown increasingly concerned about the US fiscal outlook.

Treasury Secretary Scott Bessent this week announced plans to increase buybacks of long-term Treasury securities in an effort to support liquidity and ease pressure in the bond market.

The intervention initially pushed yields lower, but much of that move was subsequently reversed. 

Dalio said his latest assessment is consistent with the debt-cycle framework he has outlined in his book How Countries Go Broke: The Big Cycle.

He argues that rising debt-service costs can eventually collide with insufficient investor demand, forcing governments to accept higher interest rates or rely on monetary financing, which could weaken currencies and fuel inflation.

Dalio's warning is a forecast, not a certainty. His recommendation reflects his longstanding view that investors should diversify away from concentrated exposure to government debt when fiscal risks become excessive.