Dialogue with Bridgewater founder Dalio: From asset allocation to wealth inheritance, 10 financial rules for Chinese frens.

Organization & Compilation: Deep Tide TechFlow

Guest: Ray Dalio, founder of Bridgewater Associates

Host: Wang Liwei

Podcast Source: Xiansheng

Original Title: Dalio's Chinese Podcast Debut: Stock and Bond Split, 10 Financial Principles for Chinese Friends

Release date: August 20, 2025

Key Summary

Exclusive interview with the founder of Bridgewater Fund, A-shares are booming, bond funds are in tears, how should we allocate our wealth? Cultivating our children's financial literacy, why give coins and give fewer toys?

In recent days, the A-shares have been booming while the bond market has seen a significant decline. Some investment advisors have posed a thought-provoking question: Should we swap our bond funds for stock funds?

Recently, Dalio has frequently appeared in our sights, partly because he published a new book: "Why Nations Fail." Over the past weekend, the news that Bridgewater had liquidated its Chinese stocks garnered quite a bit of attention, and just yesterday, a friend asked me if Bridgewater had sold off all of its Chinese stocks.

In fact, the 13F disclosures from the United States do not reflect the holdings in Hong Kong and A-shares (many global funds, including Bridgewater, have significantly reduced their positions in Chinese stocks, with Chinese stocks showing mixed performance). Looking only at the onshore market, Bridgewater's domestic funds surpassed 40 billion last year, and based on the increase over the past year, the managed scale should be around 60 billion, accounting for nearly one-tenth of Bridgewater's total global assets under management.

I have been following Dalio for nearly a decade. Recently, taking advantage of the release of his new book, I had a conversation with him. We first discussed the macro perspective of the calls and related controversies in his new book (you can refer to the text version in Caixin Weekly); afterwards, we systematically talked about his investment advice for Chinese friends from our personal perspectives. This is also his first appearance on a domestic podcast to talk about investment.

In my memory, Dalio is rarely willing to publicly and specifically discuss investments or related advice, especially regarding domestic situations. But now, we Chinese investors are facing a very special environment. On one hand, the stock market is booming, while on the other hand, in a low-interest-rate environment, it's not easy to achieve decent returns steadily. Even in the recent bull market environment, some friends have said that after three years, they haven't actually made much; and in the past two years, many friends have made quite a bit from bond funds, leading some to compose poems these days: "Bond fund, thousands of households in tears."

In the current low interest rate environment, how should we deal with significant market fluctuations? When the market is doing well, should we diversify across asset classes and regions? Dalio is bearish on U.S. Treasuries and the dollar, does that also mean he is bearish on U.S. stocks?

If you care about investment and wealth management, as well as financial security, I'm sure you will gain a lot from this conversation.

Highlights of Insights

• When certain markets rise, others may fall, reflecting different economic conditions. By achieving a balance in these investments, periodic fluctuations in the portfolio can be reduced, thereby obtaining good returns while lowering risks.
• In the long run, cash is a very poor investment. The challenge China faces is that investors often hold large amounts of funds in real estate or cash deposits, which is not a good diversified investment portfolio.
• The return on any asset typically consists of two parts: price changes and yields. When the return on an asset primarily relies on price appreciation rather than dividends, caution should be exercised.
• Investors need to periodically rebalance their asset portfolios. If there is no clear market view, a simple rebalancing strategy can be adopted: when the price of a certain asset class rises, timely reduce some positions and transfer funds to other asset categories to maintain the long-term balance of the portfolio.
• It is always a good time for diversified investment, and individuals and investors must be very cautious when trying to time the market.
• Diversification and risk balancing are important means to enhance returns and reduce risks.
• Do not attempt to predict market trends; timing the market is essentially a zero-sum game.
• Do not look at the individual parts of the portfolio in isolation, but consider how these parts come together to form a well-diversified portfolio.
• Debt is currency, currency is debt.
• Gold is the second largest reserve currency, the first is the US dollar, the second is gold, the third is the Euro, and the fourth is the Japanese yen.
• Gold is more attractive to me. Nevertheless, I still hold some Bitcoin as an alternative option.
• Stablecoins have significant advantages in trading, especially favored by those who are less concerned about interest rates and are willing to forgo interest for the convenience of trading. However, stablecoins are not a good wealth storage tool.
• Inflation-indexed bonds are an excellent tool for storing funds. They can provide compensation based on the inflation rate while also offering a certain real interest rate. This type of asset has lower risk and is an ideal investment choice.
• Everyone needs to recognize the importance of saving. Saving provides you with a foundation and a sense of security, and this security gives you freedom.
• Ensuring the basic financial security of individuals and families is crucial. To achieve this, it is important to learn investment knowledge and conduct reasonable asset diversification.
• Only after ensuring a basic standard of living can one consider taking on more risks to attempt to earn higher returns.
• Every birthday and Christmas, I give my children at home a gold coin. I tell them that you cannot sell this gold coin. You can only pass it on to the next generation on the day the monetary system collapses.

Investment Strategies Under Low Interest Rates

1. Can there be stable returns under low interest rates? The logic of the "all-weather" strategy

Host:

Currently, China is in a low interest rate environment, which typically makes it difficult to achieve ideal investment returns. However, I have noticed that Bridgewater's China All Weather Fund has performed exceptionally well in the past few years, achieving over 10% returns almost every year, while also experiencing relatively small drawdowns during market volatility.

Could you please explain how Bridgewater Associates has achieved such robust performance in such a low interest rate environment?

Ray Dalio:

I am glad you asked this question. The performance of Bridgewater Fund over the past six years has indeed been very stable, with the worst year yielding between 10% and 14%. I can't recall the exact numbers, but the average yield is around 16%. So how did we achieve this?

First, the key is to achieve a balanced portfolio through reasonable asset diversification. When certain markets rise, others may fall, reflecting different economic conditions. For example, when the stock market declines, the bond market may rise, and the gold market or inflation-hedging assets may also increase with currency depreciation. By achieving this balance in investments, cyclical fluctuations in the portfolio can be reduced, thus obtaining good returns while lowering risks.

My investment motto is to have 15 or fewer uncorrelated income streams. (Deep Tide TechFlow Note: Uncorrelated income streams refer to the performance of returns between different assets having no direct correlation, which effectively diversifies risk.) For example, in a slow deflationary environment, stocks may perform poorly, but bond yields may rise. Conversely, if there is a significant amount of money printing in the economy, inflation-hedged assets (like gold) usually perform well. By balancing these assets, attractive returns can be achieved with lower risk levels, which is the game of investing.

In the long run, cash is a very poor investment. The challenge facing China is that investors often hold large amounts of money in real estate or cash deposits, which is not a good diversified investment portfolio. Therefore, the strategy of holding a diversified asset portfolio rather than cash is very attractive. This is our core strategy, how to achieve diversification without being constrained by traditional assets. Tactical adjustments are made based on current market conditions to achieve this balance.

As I said, my current goal is to convey these principles. I am 76 years old and plan to launch an investment course to teach these investment principles. I hope to provide this knowledge to everyone in China for free or at a low cost, to help them understand how to achieve balance. Therefore, I am eager to communicate how this process works in practice. Overall, as I have described, this approach is effective.

2. The Dilemma of Bond Investment: When Returns Mainly Come from Price Appreciation Rather than Coupons, You Should Feel "Fear"

Host:

Currently, the Singapore Wealth Management Institute is conducting some research, and we hope that this research can be applied to the Chinese market.

In a low interest rate environment, long-term bonds typically perform well, which is why many Chinese investors have entered this space over the past year. However, when signs of economic recovery appeared, long-term bonds experienced a significant pullback, as seen in the past few days. Do you think there are good ways to identify these signs and adjust investment strategies in a timely manner?

Ray Dalio:

I want to clarify one point: the returns of any asset typically consist of two parts: price changes and yields. During the investment cycle, there can be a situation where the prices of certain low-yield assets are driven up, becoming very expensive. At this time, the investor's returns primarily come from the increase in asset prices, rather than from coupons. When this happens, although it seems profitable in the short term, the future yield can become very low. This low yield is actually an important warning signal that indicates greater risks may arise in the future. Therefore, when you find that returns depend mainly on price increases rather than coupons, you should be cautious.

To address this situation, **investors need to regularly rebalance their portfolios. If there is no clear market view, a simple rebalancing strategy can be adopted: when the price of a certain asset class rises, appropriately reduce some positions and transfer funds to other asset classes to maintain the long-term balance of the portfolio. **For example, Bridgewater Associates has achieved robust investment returns through such a dynamic balancing strategy. By regularly adjusting asset allocation, risks can be effectively reduced while maintaining the stability of the portfolio.

3. Regional Dispersion and Timing Traps: Abandon Market Predictions

Host:

I believe that in a low interest rate environment, a good investment approach is to achieve geographical diversification. Bridgewater has been doing this for many years. I think Japan has also achieved this through their NISA program. Now, China has recently provided more QDII quotas for Chinese investors.

Some Chinese people believe that the US stock market is at a historic high and too expensive; the European stock market is also at a historic high. Do you think geographic diversification is important? Is now a good time for geographic diversification?

Ray Dalio:

I believe that it is always a good time for diversified investment. Individuals and investors must be very cautious when trying to time the market. They should first assume that they cannot accurately predict market trends, and then ask themselves, if I have no opinion on the market, what kind of investment portfolio should I have? This portfolio should be a balanced and diversified mix, as diversification means that if you do not know how a certain asset will perform, maintaining a balanced portfolio is the best choice, and individuals cannot successfully time the market.

Do not base your decision to build an investment portfolio on whether the U.S. stock market is booming; the key is to maintain balance. I would advise any investor to consider keeping half of their funds local, but in a diversified portfolio, adopting an "all-weather" investment approach. The so-called "all-weather" portfolio includes gold, bonds, and investments spread across about 10 different markets. But know how to balance well; you want to balance risk, not just in dollars or any other currency.

Diversification and risk balancing are important means to enhance returns and reduce risks.** Simply put, if I introduce uncorrelated assets, let's say I have one asset and then introduce a second and third asset that are uncorrelated but have similar expected returns, I can reduce risk by about one third. If I can reach 10 to 15 uncorrelated assets, I can reduce risk by 60% to 80% while maintaining the same return. This means that the return-to-risk ratio can increase to five times the original. In other words, you can achieve the same expected return, but the risk you take is only one fifth of the original. This is the game of investing.

4. The Knowledge of Buying: (Fixed Amount) Beyond Dollar-Cost Averaging?

Host:

You mentioned not to try to time the market. So, what is the correct way to invest? For example, is a fixed amount DCA ( a good choice? Or are there other better methods?

Ray Dalio:

When investing, it is important to first clarify the risks you are willing to take, rather than just focusing on the amount invested. For example, the volatility of stocks is about twice that of bonds. Therefore, to achieve a balanced investment portfolio, it is necessary to adjust the weights according to the volatility of different assets, thereby balancing the overall risk. If this risk balance can be reasonably designed, it can achieve the expected investment goals. This may sound a bit complicated, but dollar-cost averaging is indeed a good approach, as it avoids the risks of a lump-sum investment while gradually accumulating assets. However, the key is to understand how to construct a balanced "neutral portfolio," which is a portfolio that can operate stably in different market environments.

Emphasize again, do not try to predict market trends, as timing the market is essentially a zero-sum game. In every trade, there are buyers and sellers, and there are always some smart investors in the market. It's like playing cards at a poker table; you need to ask yourself: who are my opponents? Only a very few people can truly succeed in the market. Bridgewater Associates invests hundreds of millions or even billions of dollars each year to study the market, yet we still see that the overall market performance has been generally poor over the past six years. Therefore, if you wish to achieve stable and good returns, I recommend adopting a risk-balanced investment approach instead of trying to predict the market.

Once again, I mention not to try to time the market, because you must understand that market timing is a zero-sum game. Every buyer has a seller, and there are those who are smart. It's like going to a poker table to play cards; do you know who you're up against? Only a small portion of people can really do well. We invest hundreds of millions every year, and it could even reach a billion dollars to try to play this game. Even if you look at the history of investment managers over the past six years, the overall market performance has been poor. Therefore, if you hope to achieve good returns and consistency, I encourage adopting this balanced approach.

Host:

So, would you suggest a default all-weather portfolio for the Chinese market? I remember back in 2014, you provided a version based on the US market for Tony Robbins. What allocation would you recommend for Chinese investors?

Ray Dalio:

The same principles apply to any country; it is not related to the country but rather to the available investment tools. In the Chinese market, we can also utilize local investment tools to achieve risk balance. The fund I mentioned is a local fund that can accomplish this. I want to emphasize that there are available tools in the onshore market to achieve this goal.

Advantages and Disadvantages of Major Asset Classes

)# 5. Gold: How to View the Allocation of This 'Non-Yielding' Asset

Host:

Gold is an asset that you value highly. Over the past year, it has performed quite well, and from a long-term perspective of 20 or 30 years, its performance has also been quite good. However, many people prefer to invest in productive assets. How should we think about or persuade ourselves to invest in non-productive assets like gold?

Ray Dalio:

Gold is a non-productive asset, just like cash. If you put money in cash, it is also non-productive, and the two are very similar. Therefore, you need to view gold as a form of currency. Its main characteristic is that it is an effective diversification asset; when currencies perform poorly, gold often performs well.

I believe that most people view their portfolios and costs from the perspective of their currency, which can lead to misjudgments because they are not aware that their currency is depreciating. They see other assets rising, such as gold or the prices of other assets increasing. But if you look at these things in terms of inflation-adjusted dollars or inflation-adjusted currency, that is the correct perspective. For a long time, gold has been money, and perhaps some digital currencies are also seen as alternative money. Overall, debt is also money, and there is too much debt.

What I want to express is that during this period, the value of currency has indeed decreased. I want to emphasize that when I mention gold, I am not saying you should hold more than an appropriate diversification ratio of gold. What I mean is that in an optimized portfolio, the proportion of gold is usually around 15%. But whether it is 10% or 5%, gold can provide diversification for the other parts of the portfolio. Therefore, it must be seen as a risk-reducing tool to cope with significant overall depreciation of currency due to excessive debt and money printing. Thus, gold should be a part of the portfolio. But I want to emphasize again, do not look at each part in isolation, but consider how the parts combine to form a well-diversified portfolio.

6. US Dollar and US Treasury Bonds: Why the Bearish Outlook

Host:

If we look at the value of currency, such as the US dollar, I think you recently mentioned that the US economy is relatively strong while the global economy is relatively weak. This situation seems to favor a strong dollar. But in your view, is the dollar facing a structural downward trend?

Ray Dalio:

What I want to emphasize is the supply and demand relationship of debt, and debt is currency, and currency is also debt. Debt is a commitment to provide you with a certain amount of currency. Therefore, debt can be seen as currency that has not been recovered. When you store your funds, you are storing them in debt. This is what I mean by "debt is currency, and currency is debt."

When debt is excessive and grows too quickly, debt problems arise. In this case, the way to address these issues inevitably faces a choice: either you choose hard currency, which changes the supply and demand relationship, necessitating an increase in interest rates, leading to a decrease in demand and consequently a market downturn; or you alleviate the debt problem through the issuance of more currency. In the current economic environment, this choice is a core issue.

7. Bitcoin and Gold: Dalio's Investment Perspective

Host:

You just mentioned digital currency. I remember you have also held some Bitcoin in recent years. So, what is your view on the investment value of Bitcoin? What are its advantages and disadvantages compared to gold?

Ray Dalio:

I have held a small amount of Bitcoin for several years and have kept this ratio unchanged. I view Bitcoin as a tool for diversified investment, and compared to gold, it is a diversified option. What is a reliable currency for storing wealth? Bitcoin is undoubtedly very popular, but I think it has some drawbacks, such as I do not believe central banks will hold Bitcoin.

Gold is the second largest reserve currency, the first is the US dollar, the second is gold, the third is Euro, the fourth is Yen, and so on. Central banks hold gold. There is a saying that gold is the only asset you can own that is not a liability of someone else. This means that gold itself is currency; it does not rely on someone else's promise to pay you money. Gold has intrinsic value and can be held without these risks. This is especially important in challenging political or geopolitical environments, such as the case when Russia faces sanctions, or during World War II when Japanese assets were frozen. Therefore, for these reasons, gold is more attractive to me. Nevertheless, I still hold some Bitcoin as an alternative option.

8. The Truth About Stablecoins: Are They Suitable for Holding?

Host:

I noticed that you hold Bitcoin because it has the function of value storage. Nowadays, many people are starting to pay attention to stablecoins, as they also seem to achieve similar functions. What are your thoughts on this?

Ray Dalio:

Stablecoins peg currencies to stable assets. In other words, it represents a claim on the pegged currency, but typically does not provide interest. From a financial perspective, it is worse than holding a currency asset that offers interest. However, stablecoins do have significant advantages in trading, especially in international transactions. They can almost be seen as a settlement tool that simplifies cross-border capital flows. Therefore, they are particularly favored by those who are less concerned about interest rates and are willing to forgo interest in exchange for the convenience of trading.

In countries with high inflation, interest rates may be negligible, and people are more likely to choose stablecoins for transactions. For example, in places like Argentina, if reserve currencies that offer interest cannot be obtained, stablecoins may become an alternative option. This is how stablecoins operate, but they do not fulfill the primary function of a currency with limited supply and stability related to other currencies. In contrast, inflation-indexed bonds are a better asset choice.

Currently, China has not yet launched inflation-indexed bonds, **but this type of bond is an excellent tool for storing funds. It can provide compensation based on the inflation rate, while also offering a certain real interest rate. This asset has relatively low risk and is an ideal investment choice. **

Host:

After listening to your analysis, I began to think about how large the demand for stablecoins will actually be. Can it really solve the debt problem in the United States?

Ray Dalio:

This issue still needs time to observe. The fundamental logic of stablecoins is that buyers will purchase them, especially in emerging market countries where economic instability is higher, and buyers are less concerned about interest rates; they will buy stablecoins for trading purposes.

The law requires stablecoin producers to back their coins with government bonds and government debt. Therefore, the purchase of stablecoins will lead to the purchase of U.S. government debt, but there is a problem here: where does this funding come from? If they hold U.S. debt, they will transfer it to stablecoins. So what is the new demand? I think stablecoins are not a very good tool for storing wealth.

The Underlying Logic of Family Wealth

9. Dalio's Family Finance Lesson: Insist on Sending Gold Coins to Your Children and Grandchildren, Instead of Toys?

Host:

In an interview in 2019, you mentioned that individual investors face some significant challenges. So, can you provide some practical investment advice for the general public? I've also heard that you have been educating your grandchildren on how to invest and manage personal finances.

Ray Dalio:

I believe that everyone needs to recognize the importance of saving. I personally calculate how many months my lifestyle could be sustained without any new income. Then, I double that number to prepare for unexpected situations, such as a significant economic downturn.

Savings provide you with a foundation and security, and this security gives you freedom. This is very important. What I do for my children (who are now all adults) and grandchildren is that every birthday and Christmas I give them a gold coin. I tell them, you cannot sell this gold coin. You can only pass it on to the next generation on the day the monetary system collapses. This way, they can see the value of the gold coin passed down through generations. I find this practice much more meaningful than simply giving toys. Of course, I occasionally give some toys, but not too many, because toys quickly lose their appeal, while gold coins can help them understand the process of saving and accumulating wealth.

My core point is that ensuring the basic financial security of individuals and families is crucial. To achieve this, it is very important to learn investment knowledge and make reasonable asset allocation. Only after ensuring a basic standard of living can one consider taking on more risks to try to earn higher returns. For me, this kind of high-risk investment is more like a game, and I really enjoy the process because it is full of challenges and fun.

When saving, it is important to consider the impact of inflation on your funds. Simply put, you are not only storing the currency itself, but also its purchasing power. For example, if the interest rate is 4% and the inflation rate is 3%, then your real return is only 1%. These are my suggestions for ordinary people, and they are principles that I and my family have been practicing. Only after mastering this basic knowledge can one further explore higher-risk investment opportunities.

Host:

This is also why many people now choose to build different investment portfolios, such as a safe investment bucket and a more risky market investment bucket.

Ray Dalio:

But I want to remind everyone that the investment market is like a game of poker, where you are facing many smart opponents who may invest hundreds of millions or even billions of dollars in this game. Therefore, beginners are best off starting with small investments to accumulate experience through practice. This way, you can observe the performance of professional investors and review their strategies and results over the past few years, rather than being blindly confident. Understanding this and staying humble is key to successful investing.

10. The Importance of Rebalancing: Overcoming Emotional Investing

Host:

One very interesting suggestion you gave me last time was to act against your own intuition. But I think this is not easy for most people. So, what should be done when adjusting a portfolio?

I noticed that the Pure Alpha fund performed well in the first half of this year, and it also excelled in the global hedge fund industry last year. However, it returned some cash to its clients. In addition, China's OS fund also took similar actions after achieving over 15% half-year returns earlier this year.

Regarding rebalancing, can you share some experiences or lessons? What is your perspective on this?

Ray Dalio:

Rebalancing is fundamentally about setting a strategic asset allocation target to achieve a balanced portfolio. When certain markets perform well and asset prices rise, while others perform poorly, rebalancing can help you adjust your portfolio according to the established goals. This not only allows you to sell high for a profit but also to buy low, thereby maintaining investment discipline. Therefore, rebalancing is very important in investing.

Host:

It does sound like it requires strong discipline and psychological control.

Ray Dalio:

This is the essence of the game, just like many things in life, it requires self-control. For decades, I have been recording my decision-making rules and organizing these rules into a set of "principles." Subsequently, I transformed these principles into computer programs to execute my investment plan in a systematic way. This helps to avoid being influenced by emotions because I know what the expected outcome of the plan is.

You must have a game plan. If you are going to do this, your game plan should be backtested so that you can understand how the plan performs. Then, you will be able to avoid emotional decisions that lead to wrong choices.