Daily Traders Edge

Dalio Predicts The Chance Of Recession… And It’s Not Good

February 22
11:38 2018

CAMBRIDGE, Mass. (Reuters) – Billionaire investor Ray Dalio, who founded world’s largest hedge fund Bridgewater Associates, thinks there is a relatively high chance the U.S. economy will stumble into a recession before the next presidential election in 2020.

Dalio said the U.S. economy is not currently in a bubble. But he reasoned that it might not take long to get there and then to move on to a “bust” phase.

”I think we are in a pre-bubble stage that could go into a bubble stage … The probability of a recession prior to the next presidential election would be relatively high, maybe 70 percent, Dalio said during an appearance at the Harvard Kennedy School’s Institute of Politics.

Dalio, whose fund invests some $160 billion, stepped down from the hedge fund’s day-to-day operations nearly a year ago, but his views on markets and the economy are still very closely followed.

At the event, Lawrence Summers, a former Treasury secretary and former Harvard president, asked Dalio questions including what advice he would give individual investors who may have been rattled by the market’s recent turbulence after years of steady gains.

Dalio said investors should not panic and need to have a sound plan. If people become scared after the market has tumbled, it is too late, Dalio said, adding that people should probably buy when they are frightened and sell when they are not.

Continue Reading At Reuters

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