Important Investing Advice By Ray Dalio

INVESTOPAPER

Ray Dalio is a American Hedge Fund Manager. As of February 2020, Dalio was worth $18.7 billion. He is the founder of Bridgewater Associates. It is one of the largest hedge fund in the world. In 2021, Bridgewater Associates has about $150 billion Assets Under Management.

17 Quotes By Ray Dalio

“To make money in the markets, you have to think independently and be humble.”


“The average man tends to be much more reactive if you look at the purchases and sales that they make. When something goes up, they’re more likely to buy it. They think, ah, that’s a good investment. They don’t know how to measure that in terms of, oh, is that a much more expensive investment that’s more likely to go down?”


“The more you think you know, the more closed-minded you’ll be.”


“The biggest mistake investors make is to believe that what happened in the recent past is likely to persist. They assume that something that was a good investment in the recent past is still a good investment.”


“What is most important isn’t knowing the future—it is knowing how to react appropriately to the information available at each point in time.”


“Remember that the only purpose of money is to get you what you want, so think hard about what you value and put it above money. How much would you sell a good relationship for? There’s not enough money in the world to get you to part with a valued relationship.”


“To be successful, you’re betting against the consensus, and you have to be right, the consensus is built into the price. So because the consensus is built into the price, and assets price themselves in a way that they’re all competing, and they’re all of the equal value in a certain sense. There’s risk premium of equities over cash and bonds will have that over whatever, but basically, they’re all priced that way. So like think of it as going to betting on a sports team or in other words, or horse racing.”


“It all comes down to interest rates. As an investor, all you’re doing is putting up a lump-sump payment for a future cash flow.”


“Systemize your decision making.”


“When growth is slower-than-expected, stocks go down. When inflation is higher-than-expected, bonds go down. When inflation is lower-than-expected, bonds go up.”


“If you don’t own gold, you know neither history nor economics.”


“There are two main drivers of asset class returns – inflation and growth.”


“In the markets, you can do a huge amount of work and still be wrong.”


“In trading you have to be defensive and aggressive at the same time. If you are not aggressive, you are not going to make money, and if you are not defensive, you are not going to keep money.”


“The consensus is often wrong, so I have to be an independent thinker. To make any money you have to be right when they’re wrong.”


“Any damn fool can make it complex. It takes a genius to make it simple.”


“If you’re not failing, you’re not pushing your limits, and if you’re not pushing your limits, you’re not maximizing your potential.”


Suggested Readings:

25 Best Benjamin Graham Quotes On Investing

15 Best Warren Buffett Quotes on Investing

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