Billionaire Ray Dalio says today’s biggest investing story is under many people’s radar.
Dalio, who founded the asset management firm Bridgewater Associates, say The real investment story of last year is the devaluation of the fiat currency and the underperformance of US stocks versus gold and foreign stocks.
“While the facts and returns are indisputable, I see things differently than most. While most people see US stocks and especially US AI stocks as the best investments and therefore the biggest investing story of 2025, it is indisputably true that the biggest returns (and therefore the biggest story) came from:
- What happened to the value of money (especially the dollar, other fiat currencies and gold).
- US stocks are significantly underperforming both non-US equity markets and gold (which was the best performing major market), mainly due to fiscal and monetary stimulus, productivity gains and large shifts in asset allocation away from US markets.”
Dalio highlights how gold vastly outperformed the S&P 500 last year.
“The best major investment of the year was long gold (with a 65% return in dollar terms), which outperformed the S&P index (which returned 18% in dollar terms) by 47%. Or, put another way, the S&P fell 28% in gold money terms…
When one’s own currency falls, it appears as if the things it measures have risen. In other words, if you look at investment returns through the lens of a weak currency, they appear stronger than they actually are.”
He also says non-US stocks outperformed US stocks by a double percentage point last year as much of the wealth left the US markets.
“While US stocks were strong in dollar terms, they were much less strong in strong currencies, and significantly underperformed other countries’ stocks. Clearly, investors would have much preferred to be in non-US stocks over US stocks, just as they would have preferred to be in non-US bonds over US bonds and US cash. More specifically, European stocks outperformed US stocks by 23%, Chinese stocks outperformed US stocks by 21%, UK stocks outperformed US stocks by 19%, and Japanese stocks outperformed US stocks by 23%. performed 10% better…
In other words, there were major shifts in flows, values and, in turn, wealth away from the US, and what is happening is likely to lead to more rebalancing and diversification.”
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