Jing Pan

Sat, Jun 21, 2025, 4:17 AM7 min read

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Ray Dalio, founder of the world’s largest hedge fund, Bridgewater Associates, isn’t usually known for alarmist takes. But his latest warning is unusually stark.

“Right now we are at a decision-making point and very close to a recession, and I’m worried about something worse than a recession if this isn’t handled well,” Dalio said in an appearance on NBC News’ “Meet the Press.”

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Recession warnings have been piling up as Trump’s sweeping tariffs and global tensions escalate. But Dalio sees the threat as “much more profound.”

“We have a breaking down of the monetary order,” he said.

Dalio highlighted profound shifts in both the domestic and world order — including a move away from the U.S.-led era of multilateralism toward a more unilateral world order, “in which there’s great conflict.”

While it remains unclear how the uncertainty around tariffs will play out — or whether the recession warnings will prove correct — markets have already been whipsawed.

The silver lining? Dalio has long championed a strategy he calls the “Holy Grail of investing.” With volatility rising and risks mounting, now may be the time to pay attention.

“The Holy Grail of investing is to find 10 to 15 good, uncorrelated return streams,” Dalio explained in a video posted to his YouTube channel.

“If you find a number of return streams, a number of investments that are good and uncorrelated, you will have the average return of those so you don't lessen your return… But at 15, you'll eliminate 80% of your risk, so you'll improve your return-to-risk ratio by a factor of five.”

Dalio added that there’s “no way” to improve your ability to pick winning investments by a factor of five because it’s a highly competitive game. But with his Holy Grail strategy, he said, investors can dramatically boost their return-to-risk ratio through smart diversification.

While he didn’t name specific assets in that clip, Dalio has long emphasized the importance of diversification — and recently, he singled out one time-tested asset as a necessary component of a resilient portfolio: gold.