Ray Dalio, the founder of Bridgewater Associates, suggests allocating 15% of a portfolio to long-term assets like gold and bitcoin. On CNBC’s Master Investor Podcast, he expressed a preference for gold over bitcoin but left the choice open to individual judgement.<\/p>\n
Dalio emphasised the precarious economic state of the U.S. due to its growing national debt. He foresaw the necessity for the U.S. government to issue nearly $12 trillion more in Treasuries next year just to manage this debt. He warned that not just the U.S., but all Western countries are trapped in a similar “debt doom loop”.<\/p>\n
Given the warning about the devaluation of money, we believe derivative traders should position for rising hard asset prices. This means exploring long-dated call options on both gold and bitcoin to capitalize on potential upside with managed risk. We are treating this as a bet on increased volatility and a flight to scarcity.<\/p>\n
His stated preference for gold is timely, as the metal has been trading near all-time highs, recently pushing past $2,300 an ounce. We can express this view through options on the SPDR Gold Shares (GLD) exchange-traded fund. Historically, gold has served as a reliable hedge during periods of significant government debt expansion, which is the exact scenario being described.<\/p>\n
For the digital asset allocation, the market structure has been transformed by the recent approval of spot Bitcoin ETFs. BlackRock’s IBIT fund, for example, has seen over $17 billion in net inflows since its launch in January 2024, signaling strong institutional demand. We can gain leveraged exposure to this trend through CME Group’s bitcoin futures contracts.<\/p>\n
The fundamental problem identified is the “debt doom loop,” with the U.S. national debt now sitting above $34.6 trillion. A direct way for us to trade this view is by anticipating higher interest rates through short positions in Treasury futures. Buying put options on a long-duration Treasury bond ETF like iShares 20+ Year Treasury Bond ETF (TLT) is another way to profit if bond prices fall as a result of the government issuing more debt.<\/p>\n
These dire economic warnings suggest a period of significant market turbulence is ahead. We should therefore consider positioning for a spike in broad market volatility. Buying calls on the CBOE Volatility Index (VIX) could serve as an effective portfolio hedge against the kind of systemic risk that has been outlined.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Ray Dalio recommends 15% in long-term assets, warns of U.S. debt crisis and Western “debt doom loop.”<\/p>\n","protected":false},"author":62,"featured_media":16973,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-27500","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/27500","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=27500"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/27500\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/16973"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=27500"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=27500"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=27500"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}