Dalio Backs Chinese Assets: Undervalued and Attractive
At the Greenwich Economic Forum held in Hong Kong on Wednesday, Ray Dalio expressed his support for Chinese assets:
"Diversifying investments and investing in China is desirable, and Chinese assets are very attractively priced."
Dalio believes that the potential returns from investing in the world's second-largest economy, China, outweigh the risks.
He stated that despite various challenges, there are indeed effective ways to invest in China, and Bridgewater Associates has performed very well in China over the past five years.
Dalio also emphasized the importance of diversification due to the massive debt, unprecedented internal conflicts in developed countries, natural disasters (resulting in an annual GDP loss of 8% globally), pandemics, and the AI-driven industrial revolution. These uncertainties necessitate effective diversification in investments, including across countries, currencies, and asset classes.
Furthermore, Dalio indicated a preference for equities over bonds:
"Bonds may not provide sufficient returns. Central banks hold large amounts of bonds and are incurring losses, which they may need to monetize, a typical inflationary outcome. Gold should also be part of the portfolio, as it is the third-largest reserve currency, after the dollar and the euro."
"Bonds may not provide sufficient returns. Central banks hold large amounts of bonds and are incurring losses, which they may need to monetize, a typical inflationary outcome. Gold should also be part of the portfolio, as it is the third-largest reserve currency, after the dollar and the euro."
According to Stock Connect data, foreign funds bought 8.8 billion yuan ($1.2 billion) of RMB-denominated stocks in May, with a net purchase of $11.5 billion this year.
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