Ray Dalio recommends against investing in bonds and debt

Ray Dalio – the Founder of Bridgewater Associates is comfortable with holding cash in this environment.

Dalio is not interested in bonds and debt

Lingering inflation and fears of a further increase in interest rates has pushed yield on the U.S. 30 Year Treasury bill to over 5.0%.

A high-yield savings account and certificate of deposit currently also pays a lucrative 4.0%. Still, Dalio said at the Milken Institute Asia Summit in Singapore today:

I don’t want to own debt … bonds and those kinds of things. Temporarily, right now, cash I think is good … and the interest rates are fine. I don’t think it will be sustained that way.

Earlier this week, the Bureau of Labour Statistics said inflation was up 0.6% for the month in August versus 0.5% expected as Invezz reported here.

Why doesn’t Dalio like bonds and debt?

On Friday, the hedge fund manager reiterated importance of a diversified investment portfolio and recommended putting money in asset classes that are creating or deploying new technologies as best as possible.

Elaborating further on why he’s not interested in bonds and debt, he dubbed it a mistake to believe “markets that performed well are good investments, rather than more expensive”.

Also today, the prelim University of Michigan consumer sentiment index printed at 67.7 for September versus 69.5 in August – suggesting consumers are a bit more pessimistic this month.

The U.S. Federal Reserve is scheduled for its next policy meeting in the coming week. Ahead of it, the benchmark S&P 500 index is down close to 3.0% versus its year-to-date high.