According to billionaire Ray Dalio, the most significant investment story currently flying under the radar is the devaluing of fiat currency and the underperformance of US stocks compared to gold and foreign equities.
Dalio, the founder of Bridgewater Associates, pointed out that while many see US stocks, especially AI stocks, as the top investments for 2025, the real story lies in the devaluation of money and the poor performance of US stocks relative to other markets.
- Gold outperformed the S&P 500 by a significant margin last year, with a return of 65% compared to the S&P’s 18% in dollar terms.
- Non-US stocks also outperformed US stocks by a wide margin, as wealth flowed out of American markets into other countries.
Dalio emphasized the importance of looking at investment returns through the lens of currency strength, as a weak currency can distort the true performance of assets.
Overall, there were significant shifts in wealth away from the US last year, leading to more diversification and rebalancing in the investment landscape.
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