Billionaire Ray Dalio offers fresh tips on how to be a better investor
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If you follow the hot stocks of the moment, such as Magnificent Seven, you are probably in a hurry to watch their growth.
However, “I think it’s very similar to the Internet and Dot-COMs,” said the founder of Bridgewater Associates. Ray Dalio During a conversation with Yahoo Finance Executive Editor Brian Sozi For the opening application patch (see the video above or listen below). The couple sat down during the World Economic Forum in Davos in Switzerland, and Dalio presented ideas, from leadership to his personal investment mantraction.
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DALIO has a five-decade market feedback. He founded Bridgewater in 1975 and turned the company as a result of inefficient actions when he left a two-room apartment, turned into a company Fortune classified the fifth private company in the United States.
In the industry known to be adhered to the order Collection of principles And by widely distributing them, Dalio is the author of several books on this topic. His last book, “How did the countries fail?” Principles of a large debt cycle, where do we go and what should we do? “The book is expected in September.
Instead of accumulating everything in hot reserves, Dalio advised to consider more diversification, investing in 10 to 15 “well, unreliable lucrative streams that are balanced with risks.” Calling this strategy by his “holy writing and investment … MANTRA,” he said to Sozi. “If you reach this mantra, you will earn wealth.”
“Everyone thinks what is best debt,” he continued. “They do not realize that in case of diversification, the first three diversified, relatively unrelated assets will almost halve the risk. That means you doubling your return-risk ratio. “
Dalio also advised that this type of strategy often requires patience during deployment, which can be difficult in the noise generation. “The game is played on not to go out,” he said. “The nature of the loss [is]You lose 50%, you need to work 100% to return it. “
For the evergreen investor, which has $ 1,000 investments, Dalio advised to think about the difference between Alpha and Beta.
“Alpha is a game with zero money,” he said. “To get Alfa, you have to take it away from someone else. Beta means there is an asset class. “
But even before diversification, his first advice for investors is to be humble.
“Be humble as in any game [where] You compete, “he said.
His last prompt assessed the title and noise investments. “Get away from the idea that investments that have recently been well received are better investments than more expensive. You need to know the difference between investments that have been very popular and [that’s] did well. “
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