Ray Dalio's 'Holy Grail' Investment Strategy: Why 10-15 Diversified Investments Could Make You a Fortune

In a recent interview, billionaire investor Ray Dalio offered fresh insights on successful investing, emphasizing the importance of diversification and patience in investment strategies.

What Happened: Dalio, who boasts five decades of market experience, urged investors to diversify their portfolios by investing in 10 to 15 "good, uncorrelated return streams that are risk balanced."

He labeled this strategy as his "holy grail and mantra in investing," and assured that adhering to this mantra could result in substantial wealth.

Speaking with Yahoo Finance, Dalio underscored the significance of patience in investment strategies, warning that the nature of loss necessitates investors to earn double the lost amount to recover.

"Everybody's thinking about what is the best debt. They don't realize that with diversification, the first three diversified, relatively uncorrelated assets will reduce the risk almost in half. That means you double your return-to-risk ratio," Dalio said.

Dalio further advised investors to differentiate between an investment that has increased in value and one that has performed well, cautioning against the assumption that recent good returns indicate a better investment.

Also Read: Ray Dalio Warns of Looming US Debt Crisis, Says America Faces ‘Economic Heart Attack’ Without Fiscal Cuts

"The game is played on not getting out. The nature of loss [is], you lose 50%, you have to make 100% to get it back," he further added.

"Get away from the notion that investments which have done well recently are better investments, rather than more expensive. You have to know the difference between an investment that has gone up a lot and done well. Don't assume that because it felt good recently and gave you good returns, it's a better investment," he said.

Why It Matters: Dalio’s advice comes at a time when investors are seeking guidance in an increasingly volatile market.

His emphasis on diversification and patience reflects his long-standing investment philosophy, which has guided Bridgewater Associates to become one of the world’s largest hedge funds.

Dalio’s latest book, “How Countries Go Broke: Principles for Navigating the Big Debt Cycle, Where We Are Headed, and What We Should Do,” scheduled for release in September, is expected to provide further insights into his unique investment principles.

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