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Ray Dalio continued to urge investors to stay away from cash amid high inflation and warned stocks look even worse.
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Instead of stocks or cash, "real assets" are the best investments, he told CNBC.
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"You're going to have an environment of negative real returns," Dalio said.
Billionaire investor Ray Dalio says 'cash is still trash' but stocks are even worse as the Fed struggles with inflation.
Billionaire investor Ray Dalio continued to urge investors to stay away from cash amid high inflation and warned stocks look even worse.
The founder and co-chief investor of Bridgewater Associates, the world's largest hedge fund, has been saying for years that cash is trash. In an interview with CNBC Tuesday at the Davos World Economic Forum, he doubled down.
"Of course cash is still trash," he said. "[Do] you know how fast you're losing buying power?"
He added, "equities are trashier."
"You're going to have an environment of negative real returns," Dalio maintained.
Think about it: the market dropped 25%+ since 2021 and it may have recovered, but the Fed printed trillions of dollars eroding the purchasing power of the dollar. Your investment account is likely just now getting back to where it was 3 years ago - Minus 17% in dollar purchasing power.
This is what Dalio means when he says negative real returns.
When asked whether the Fed can effectively reduce demand without breaking the back of the economy, he answered "no," and said Fed rate hikes won't keep up with inflation, which is still at 40-year highs above 8%.
Meanwhile, Bridgewater co-CIO Bob Prince told Bloomberg TV that the US economy is on the cusp of stagflation and investors are yet to fully price it in, warning that markets are being too optimistic about inflation coming down.
