Ray Dalio urges investors to cut bonds and hold up to 15% in gold

Billionaire investor Ray Dalio said investors should reduce their bond holdings and put as much as 15% of their portfolios in gold to hedge against the risk of a US debt crisis he says could arrive within three years.

In a Friday LinkedIn post, the Bridgewater Associates founder recommended diversifying across assets and countries with strong finances. He also suggested holding a small amount of Bitcoin, saying gold and Bitcoin could reduce risk and improve returns.

Dalio’s comments came as long-term Treasury yields reached multiyear highs and Japan sold US bonds to support the yen. Treasury Secretary Scott Bessent announced plans to increase buybacks of long-dated debt, but the move has so far offered limited short-term support.

Dalio estimated US government revenue at about $5.5 trillion this year against $7.5 trillion in spending, creating a $2 trillion shortfall. He said interest costs would reach about $1 trillion, while roughly $10 trillion of debt needs to be refinanced.

Dalio said the US could face a debt crisis in three years, give or take two, unless policymakers reduce the budget deficit to 3% of gross domestic product from about 6%. He said spending cuts, higher tax revenue and lower interest rates could help. Gold rose to its highest level since May on Friday, while Bitcoin topped $77,000.