Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

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petilon
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Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by petilon »

I have been staying away from bonds for over 10 years because it is so confusing. As I understand bond prices fall when interest rates go up as investors unload old bonds to buy newer bonds that bear higher interest rates. Interest rates have been low over the last decade, so why have people been buying bonds over the last decade?

And now this hedge fund manager says you're crazy if you hold bonds right now. (Ray Dalio is founder of Bridgewater Associates, the world’s largest hedge fund): https://www.marketwatch.com/story/billi ... latestnews

So much of my money is sitting in money markets right now. Because bonds are bad right now, and stocks are bad too because the upcoming crash (when poor earnings reports start rolling in) is going to be worse than 2008.

How do retirees avoid eating into principal during times like this?
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by averagedude »

Even coming out of the financial crisis, extended duration bonds have been one of the best asset classes over the last 10 years. Not saying I would invest in them now or ever.
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by kmft »

Sounds like he's long equities and wants you to hop on and pump them up for him. Do your civic duty and inflate the bubble man!
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by livesoft »

What!?? The bond fund I purchased in the last week of March has gone up over 5.2% in value. Was I crazy?

Also, I actually don't mind spending down my principal. I can't take it with me when I die.
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by Dave55 »

petilon wrote: Wed Apr 15, 2020 5:26 pm I have been staying away from bonds for over 10 years because it is so confusing. As I understand bond prices fall when interest rates go up as investors unload old bonds to buy newer bonds that bear higher interest rates. Interest rates have been low over the last decade, so why have people been buying bonds over the last decade?

And now this hedge fund manager says you're crazy if you hold bonds right now. (Ray Dalio is founder of Bridgewater Associates, the world’s largest hedge fund): https://www.marketwatch.com/story/billi ... latestnews

So much of my money is sitting in money markets right now. Because bonds are bad right now, and stocks are bad too because the upcoming crash (when poor earnings reports start rolling in) is going to be worse than 2008.

How do retirees avoid eating into principal during times like this?
What's wrong with eating principal? I saved money for retirement to use while I am retired. And it is working just fine. BTW Dalio has lots of other tools (derivatives, options, shorting stocks, swaps etc) to use to generate returns other than stocks and bonds.

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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by petilon »

kmft wrote: Wed Apr 15, 2020 5:31 pm Sounds like he's long equities and wants you to hop on and pump them up for him. Do your civic duty and inflate the bubble man!
Not true at all. Watch this video. He says coronacrash is going to be worse than 2008.
https://www.ted.com/talks/ray_dalio_wha ... al_economy
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by nisiprius »

petilon wrote: Wed Apr 15, 2020 5:26 pm I have been staying away from bonds for over 10 years because it is so confusing. As I understand bond prices fall when interest rates go up as investors unload old bonds to buy newer bonds that bear higher interest rates. Interest rates have been low over the last decade, so why have people been buying bonds over the last decade?
And yet, over the last ten years, every $10,000 invested into Total Bond (VBTLX, blue) has made $4,721; and in the other bond fund I hold, Vanguard Inflation-Protected Securities (VAIPX, orange) every $10,000 has made $4,295. That's nothing special; about any other "core" bond fund would have done about the same thing.

Source

Image

And this, during ten years in which the Fed funds rate has been close to zero for six years, and then, up until a few weeks ago, did nothing but rise?

St. Louis Fed, Fed Funds rate chart

Image

Have you noticed that some people always hate bonds, and that when bonds are low they argue both that bonds suck because interest rates can only go up and that bonds suck because interest rates will never go up?

I don't have all the answers, or even most of the answers. But you should at least now have serious doubt that "bond prices fall when interest rates go up" is the whole story, or even the most important part of the story.
Last edited by nisiprius on Wed Apr 15, 2020 5:54 pm, edited 2 times in total.
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by Triple digit golfer »

Interest rates increasing means that I will earn more interest in bonds. For a long term investor, that's a good thing.

So much hate on bonds lately, and after they did their job during the decline. I don't understand it.
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by kmft »

petilon wrote: Wed Apr 15, 2020 5:49 pm
kmft wrote: Wed Apr 15, 2020 5:31 pm Sounds like he's long equities and wants you to hop on and pump them up for him. Do your civic duty and inflate the bubble man!
Not true at all. Watch this video. He says coronacrash is going to be worse than 2008.
https://www.ted.com/talks/ray_dalio_wha ... al_economy
That was 7 days ago, he's already FOMOing into the rally now! ;)

I haven't watched the video. So...if no stocks, no bonds, and no cash (I believe he famously says "cash is trash"), then what is he proposing?
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by kmft »

kmft wrote: Wed Apr 15, 2020 5:58 pm
petilon wrote: Wed Apr 15, 2020 5:49 pm
kmft wrote: Wed Apr 15, 2020 5:31 pm Sounds like he's long equities and wants you to hop on and pump them up for him. Do your civic duty and inflate the bubble man!
Not true at all. Watch this video. He says coronacrash is going to be worse than 2008.
https://www.ted.com/talks/ray_dalio_wha ... al_economy
That was 7 days ago, he's already FOMOing into the rally now! ;)

I haven't watched the video. So...if no stocks, no bonds, and no cash (I believe he famously says "cash is trash"), then what is he proposing?
Ahhh, I just figured it out... he wants YOU out of bonds so that he can pick them up cheaper since there is nowhere else to run.

It's been a long day, and I'm not the brightest crayon in the box to begin with.
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by invest8104 »

kmft wrote: Wed Apr 15, 2020 5:58 pm
petilon wrote: Wed Apr 15, 2020 5:49 pm
kmft wrote: Wed Apr 15, 2020 5:31 pm Sounds like he's long equities and wants you to hop on and pump them up for him. Do your civic duty and inflate the bubble man!
Not true at all. Watch this video. He says coronacrash is going to be worse than 2008.
https://www.ted.com/talks/ray_dalio_wha ... al_economy
That was 7 days ago, he's already FOMOing into the rally now! ;)

I haven't watched the video. So...if no stocks, no bonds, and no cash (I believe he famously says "cash is trash"), then what is he proposing?

Gold and commodities
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by abuss368 »

Thanks but I am not a Hedge Fund manager. When Vanguard and other experts recommend no bonds, then I will listen and try to make an informed decision.
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by JoMoney »

Dalio quote in article wrote:...“If you’re holding a bond that gives you no interest rate, or a negative interest rate, and they’re producing a lot of currency and you’re going to receive that, why would you hold that bond?”...
I wouldn't, but I would hold a short-term high quality one that is paying interest.. at least relative to holding cash.
And I would only hold enough cash/bonds that I slept comfortably not worrying about the short-term problems that inevitably come up over time.
Over longer periods of time, I agree that cash (and bonds) are a lousy investment when they're earning next to nothing and the supply just keeps growing.
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by petilon »

JoMoney wrote: Wed Apr 15, 2020 6:18 pm ... but I would hold a short-term high quality one that is paying interest.. at least relative to holding cash.
What's an example of such a bond?
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by tealeaves »

I thought his "all weather portfolio" had a heavy dose of bonds. No? Or is it only for non extreme weather?
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by samsoes »

invest8104 wrote: Wed Apr 15, 2020 6:07 pm
kmft wrote: Wed Apr 15, 2020 5:58 pm
petilon wrote: Wed Apr 15, 2020 5:49 pm
kmft wrote: Wed Apr 15, 2020 5:31 pm Sounds like he's long equities and wants you to hop on and pump them up for him. Do your civic duty and inflate the bubble man!
Not true at all. Watch this video. He says coronacrash is going to be worse than 2008.
https://www.ted.com/talks/ray_dalio_wha ... al_economy
That was 7 days ago, he's already FOMOing into the rally now! ;)

I haven't watched the video. So...if no stocks, no bonds, and no cash (I believe he famously says "cash is trash"), then what is he proposing?

Gold and commodities
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by nisiprius »

Dalio quote in article wrote:...“If you’re holding a bond that gives you no interest rate, or a negative interest rate, and they’re producing a lot of currency and you’re going to receive that, why would you hold that bond?”...
I don't know, but Bridgewater's presentation of The All-Weather Story says
The fully formed All Weather emerged in 1996 as Ray, Bob and by this point the third CIO, Greg Jensen, who had joined Bridgewater out of college, sought to distill decades of learning into a single portfolio.... The ultimate asset allocation mapped asset classes onto the environmental boxes framework, as shown in the diagram below.
Image
They also knew that all the asset classes in the boxes would rise over time. This is how a capitalist system works. A central bank creates money, and then those who have good uses for the money borrow it and use it to achieve a higher return. These securities by and large come in two forms: equity (ownership) and bonds (loans). As a result, the boxes don’t offset each other entirely; the net return of the assets in aggregate are positive over time relative to cash....
There are bonds in three out of those four boxes.
All Weather grew out of Bridgewater’s effort to make sense of the world, to hold the portfolio today that will do reasonably well 20 years from now even if no one can predict what form of growth and inflation will prevail.... Anything else (asset class returns, correlations, or even precise volatilities) is an attempt to predict the future....

With the All Weather approach to investing, Bridgewater instead accepts the fact that they don’t know what the future holds, and thus choose to invest in balance for the long-run.... What the average person needs is a good, reliable asset allocation they can hold for the long-run. Bridgewater’s answer is All Weather, the result of three decades of learning how to invest in the face of uncertainty.
To me, that means that the All Weather hedge fund holds all of the assets in all of the boxes all the time. Can you find anything in the paper that says anything different?

Does what he's saying in the article jibe with this long-standing article on his website? Is his All Weather hedge fund still following the strategy described in "The All-Weather Story?" Or did it change and dump bonds recently?
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by JoMoney »

petilon wrote: Wed Apr 15, 2020 6:20 pm
JoMoney wrote: Wed Apr 15, 2020 6:18 pm ... but I would hold a short-term high quality one that is paying interest.. at least relative to holding cash.
What's an example of such a bond?
I'm currently using Series I Savings Bonds and a 1.5% bank money market account. Bank CD's would be another option of something yielding better than nothing...
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by Clever_Username »

What a coincidence, I think you'd be pretty crazy to listen to Ray Dalio for portfolio advice.

Regardless of other considerations, does he understand the purpose of asset allocation?

Hedge funds, and the people who invest in them, don't have the same worries that most of us do. Bonds serve their purpose in my portfolio just fine. I'm glad I have the bonds I do have, and I will probably end up buying more before too long.
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by March2009 »

I like listening to Ray Dalio but I'm staying with my stock/bond allocations. My bonds are 50%TIPS and none are long durations.
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by Normchad »

I don't believe hedge fund managers know any more than anybody else does. Remember, Warren Buffett bet $1M of his own money that he could beat a collection of hedge fund managers over a 10 year period. And he did, by just holding the S&P500 index.
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by csmath »

petilon wrote: Wed Apr 15, 2020 5:26 pm So much of my money is sitting in money markets right now. Because bonds are bad right now, and stocks are bad too because the upcoming crash (when poor earnings reports start rolling in) is going to be worse than 2008.
Fascinating that you have such confidence in your crystal ball and how the future will play out. You know bad earnings in the future aren't a secret and that the market isn't the same thing as the economy right?
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by mrspock »

I'm taking this thread as a very bullish sign. Thanks OP!
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by Retired1809 »

I've been reading Ray Dalio's LinkedIn page as well as TedX Talks and I distinctly understood his "All weather Portfolio" as:
30% Total Stock Market Index VTI
40% iShares Long term Treasury Bond fund TLT
15% iShares 3 - 7 year Treasury Note fund IEI
7.5% Gold GLD
7.5% iShare S&P Commodity Index Trust GSG

Note: The bond positions above total 55% of the portfolio and my choice would be to use the Vanguard Total Bond instead.

My question is how does the Headline above square with Dalio's suggestion of holding 55% of his All-Weather Portfolio in Intermediate and Long Term bonds?
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by Stormbringer »

The thought of loaning someone money for 10 years @ 0.63% nominal interest makes my stomach churn.
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by SevenBridgesRoad »

petilon wrote: Wed Apr 15, 2020 5:26 pm ...Interest rates have been low over the last decade, so why have people been buying bonds over the last decade?...

...How do retirees avoid eating into principal during times like this?...
It seems everyone is reacting/responding to your first question. But what about your second question? Don't the common safe withdrawal rate methods "eat into principal"? I guess I don't understand what you are asking (second question).
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by Normchad »

I'll either be eating principal or I'll be eating cat food.....

For the record, I'm going with a 3.65% WR, wish me luck. (Or buy stock in Alpo)
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by petilon »

Retired1809 wrote: Wed Apr 15, 2020 7:48 pm 40% iShares Long term Treasury Bond fund TLT
15% iShares 3 - 7 year Treasury Note fund IEI
Those two bond ETFs are the perfect example of why I don't understand why people investing in bonds despite low interest rates in the last decade. I plugged those two ETFs into morningstar.com and it looks like both those ETFs have been under water for the most part of the last 5 years. They cash is bad, but bonds look worse.

May be I am missing something here. Do morningstar charts only show nav and not interest paid?
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by Triple digit golfer »

petilon wrote: Wed Apr 15, 2020 8:25 pm
Retired1809 wrote: Wed Apr 15, 2020 7:48 pm 40% iShares Long term Treasury Bond fund TLT
15% iShares 3 - 7 year Treasury Note fund IEI
Those two bond ETFs are the perfect example of why I don't understand why people investing in bonds despite low interest rates in the last decade. I plugged those two ETFs into morningstar.com and it looks like both those ETFs have been under water for the most part of the last 5 years. They cash is bad, but bonds look worse.

May be I am missing something here. Do morningstar charts only show nav and not interest paid?
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by HomerJ »

petilon wrote: Wed Apr 15, 2020 8:25 pm
Retired1809 wrote: Wed Apr 15, 2020 7:48 pm 40% iShares Long term Treasury Bond fund TLT
15% iShares 3 - 7 year Treasury Note fund IEI
Those two bond ETFs are the perfect example of why I don't understand why people investing in bonds despite low interest rates in the last decade. I plugged those two ETFs into morningstar.com and it looks like both those ETFs have been under water for the most part of the last 5 years. They cash is bad, but bonds look worse.

May be I am missing something here. Do morningstar charts only show nav and not interest paid?
Morningstar "$10,000 grew to <whatever>" charts do include dividends, which is good.

And TLT has indeed done poorly for most of the past 5 years... But it did jump 33% in the past year which means it has returned almost 5% a year over the past 5 years... Is that better or worse than cash?

Total Bond Market Index Fund, which is more general fund with more steady growth has returned about 4% a year over the past 5 years... Is that better or worse than cash?

Bonds have totally worked during the past 10 years. Total Bond has returned about 4% a year for the entire 10 years, and TLT has returned about 6% a year over the past 10 years.
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by venkman »

"You'd be crazy to hold bonds right now" is the new "Nobody goes there anymore because it's too crowded."
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by VeganBH »

I understand next to nil about bonds. But I do know my VBTLX (Total Bond Market Index) has returned: 5.02% YTD; and 1-year return of over 9%. I wish my crystal ball was working for the future.... :happy
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by kmft »

samsoes wrote: Wed Apr 15, 2020 6:24 pm
invest8104 wrote: Wed Apr 15, 2020 6:07 pm
kmft wrote: Wed Apr 15, 2020 5:58 pm
petilon wrote: Wed Apr 15, 2020 5:49 pm
kmft wrote: Wed Apr 15, 2020 5:31 pm Sounds like he's long equities and wants you to hop on and pump them up for him. Do your civic duty and inflate the bubble man!
Not true at all. Watch this video. He says coronacrash is going to be worse than 2008.
https://www.ted.com/talks/ray_dalio_wha ... al_economy
That was 7 days ago, he's already FOMOing into the rally now! ;)

I haven't watched the video. So...if no stocks, no bonds, and no cash (I believe he famously says "cash is trash"), then what is he proposing?

Gold and commodities
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by willthrill81 »

petilon wrote: Wed Apr 15, 2020 5:26 pm How do retirees avoid eating into principal during times like this?
As noted already, there's nothing wrong with 'eating into your principal', which I suppose you mean the inflation-adjusted starting balance of your portfolio on the day you retired. It's there to be used. Passing it down to someone else is a nice cherry, but it's not the cake.
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by David Althaus »

willthrill is absolutely correct in my mind. My heirs may have to do with less. Plus, bonds are for ballast. Your portfolio total generates your dividend.

All the best
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by Anon9001 »

Huh who? It depends what bonds you are talking about. Here I have much higher interest rates than developed countries. I am taking full advantage of it by locking into the rates for 25 years. I expect these rates to go down significantly in the coming decades as foriegn investors buy these bonds from m e being glad of getting a return above 0% from their bonds.
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by MotoTrojan »

VeganBH wrote: Wed Apr 15, 2020 9:10 pm I understand next to nil about bonds. But I do know my VBTLX (Total Bond Market Index) has returned: 5.02% YTD; and 1-year return of over 9%. I wish my crystal ball was working for the future.... :happy
Who needs a crystal ball when your bond funds take future owed interest and give it to you years in advance like yours has.
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by btq96r »

So, a hedge fund guy wants the general public to buy stocks, not bonds?

Mind. Blown. :shock:
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by KSActuary »

Ray Dalio was a very successful hedge fund manager just like Bill Gates changed the world of personal computing. Not sure they are as good in their current jobs of telling us all what to do.
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by 3funder »

"right now" = market timing
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by alluringreality »

nisiprius wrote: Wed Apr 15, 2020 6:37 pm There are bonds in three out of those four boxes.
The linked article doesn't explain exactly what he was talking about. Without any context, I'll guess maybe he may have been referring to nominal bonds in the quote, which are only included in 2 of the 4 boxes. According to the chart nominal bonds are fine for falling growth and falling inflation, and inflation linked bonds work for falling growth and rising inflation. I don't think too many people would be commenting about rising growth at this time, so based on the framework of the four boxes, I'd have to surmise maybe the quote was intended as commentary about holding nominal bonds if rising inflation was to happen in the future. The link talks about "When investing over the long run, all you can have confidence in is that (1) holding assets should provide a return above cash", and by the way he talks about cash as not being inflation linked, I'd have to guess maybe he thinks that nominal bonds may not provide a return above cash. Of course I could be totally wrong, since the article does not fill in the necessary details to make actual sense of the comment.
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by Robot Monster »

invest8104 wrote: Wed Apr 15, 2020 6:07 pm
kmft wrote: Wed Apr 15, 2020 5:58 pm
petilon wrote: Wed Apr 15, 2020 5:49 pm
kmft wrote: Wed Apr 15, 2020 5:31 pm Sounds like he's long equities and wants you to hop on and pump them up for him. Do your civic duty and inflate the bubble man!
Not true at all. Watch this video. He says coronacrash is going to be worse than 2008.
https://www.ted.com/talks/ray_dalio_wha ... al_economy
That was 7 days ago, he's already FOMOing into the rally now! ;)

I haven't watched the video. So...if no stocks, no bonds, and no cash (I believe he famously says "cash is trash"), then what is he proposing?

Gold and commodities
I didn't catch the commodities recommendation, but he does recommend gold. From the Bloomberg article "Dalio Says Investors ‘Crazy’ to Hold Government Bonds Now":

Downturns of this magnitude are so dramatic that they inevitably produce a “new world order” with a very uneven distribution of winners and losers, including in asset classes, Dalio said. He cited gold and certain stocks, especially those of companies with strong balance sheets, as some of the “beneficiaries.”

Source: https://www.bloomberg.com/news/articles ... -bonds-now
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alluringreality
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by alluringreality »

Thanks for the better link. I didn't watch the video, but the text suggests he's talking about holding nominal marketable bonds in an inflationary environment. Inflation linked bonds would provide a return above what he defines as cash in inflation.
Targets: 15% I Bonds, 15% EE Bonds, 45% US Stock (Mid & Small Tilt), 25% Ex-US Stock (Small Tilt)
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by ginrummy »

Retired1809 wrote: Wed Apr 15, 2020 7:48 pm I've been reading Ray Dalio's LinkedIn page as well as TedX Talks and I distinctly understood his "All weather Portfolio" as:
30% Total Stock Market Index VTI
40% iShares Long term Treasury Bond fund TLT
15% iShares 3 - 7 year Treasury Note fund IEI
7.5% Gold GLD
7.5% iShare S&P Commodity Index Trust GSG

Note: The bond positions above total 55% of the portfolio and my choice would be to use the Vanguard Total Bond instead.

My question is how does the Headline above square with Dalio's suggestion of holding 55% of his All-Weather Portfolio in Intermediate and Long Term bonds?
I'm glad to find this question going on here this morning. I've been trying to sort it. I own this portfolio in my retirement account and it performed like a champ through all of this. So, I'm a fan.

But what I'm reading is "cash, checking deposits, savings deposits, money market funds and other items defined as “near money” — soared by $1.05 trillion to $16.7 trillion. To put that in context, the most M2 ever increased in a whole year was $967 billion in 2019. One consequence of a sudden surge in the money supply is the potential for inflation to suddenly accelerate, eroding the value of bonds’ fixed-interest payments over time and making the securities worth much less."

I know specifically that rising interest rates can hurt TLT (iShares Long term Treasury Bond), but with this much money around how will near term interest rates ever rise? Why wouldn't you hold or be bullish on TLT...because money is so cheap that people will buy stocks? :confused
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by dziuniek »

averagedude wrote: Wed Apr 15, 2020 5:30 pm Even coming out of the financial crisis, extended duration bonds have been one of the best asset classes over the last 10 years. Not saying I would invest in them now or ever.
Maybe even 30 + years....

Since: US Market, International, Long-Term Treasury

1972 9.6% 6.1% 8.6%

Yes, cherry picked data, but that's because portfolio visualizer dot com only let me do it that far back.

So, long term treasuries certainly beat international... not that far behind back US either.
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by dziuniek »

Stormbringer wrote: Wed Apr 15, 2020 7:55 pm The thought of loaning someone money for 10 years @ 0.63% nominal interest makes my stomach churn.
Sure, but if rates go even lower - you'll be making a hefty return.

How long until settlement / money market funds are back to paying 0 ?
onourway
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by onourway »

I respect Dalio's intelligence, however his primary job is to keep him (and his hedge funds) at the forefront of the news cycle, and get people like you (and the rest of us) to share his comments and discuss them. Thus, he primarily says whatever will get him the most traction in the media, not necessarily what he really believes. He may not even really know what he believes because despite the fame of his "all weather" portfolio, his suggestions seem to vary more than the hourly forecast on my phone.
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Third Son
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by Third Son »

If enough people make enough predictions, someone is bound to be right. Ray who? 8-)
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Coltrane75
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by Coltrane75 »

He's becoming like Bill Gross; constantly bloviating with predictions.
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Re: Ray Dalio: ‘you’d be pretty crazy to hold bonds’ right now

Post by watchnerd »

Coltrane75 wrote: Thu Apr 16, 2020 11:04 am He's becoming like Bill Gross; constantly bloviating with predictions.
I find it deeply ironic that he's saying this after he teamed up with Tony Robbins to create the "All Weather" portfolio that is 40% long Treasuries.
70% Global Market Weight Equities | 15% Long Treasuries 15% short TIPS & cash || RSU + ESPP
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