Key Words: Cash is no longer trash, says Dalio, who calls it more attractive than stocks and bonds

by | Feb 2, 2023 | Stock Market

“‘Cash used to be trashy. Cash is pretty attractive now. It’s attractive in relation to bonds. It’s actually attractive in relation to stocks.’”

Bridgewater Associates founder Ray Dalio no longer thinks “cash is trash.” In fact, just the opposite. Over the past year, cash has become “pretty attractive” relative to both stocks and bonds, the famed hedge-fund manager said during a Thursday interview with CNBC.

While bonds might offer investors a higher yield, swollen public-sector debts in the U.S., Europe and Japan and negative real yields have made debt securities less appealing, Dalio said. That’s a notable shift from last May, when Dalio said that cash was still “trash” but that stocks were “trashier” as the 2022 market meltdown got underway. Dalio offered an update in October, when he tweeted that he had changed his mind about cash and now viewed it as “about neutral.” Dalio has become closely associated with the “cash is trash” line after using it in several interviews dating back to at least 2019. Back then, rock-bottom interest rates were bolstering valuations of both stocks and bonds. During the cable-news interview, Dalio offered some criticisms of bitcoin
which, like stocks, has rebounded since the start of the year. “I think you’re going to see the development of coins that you haven’t seen that will be attractive, viable coins … [but] I don’t think bitcoin is it,” he said. The billionaire recently stepped back from day-to-day management at Bridgewater Associates, the pioneering hedge fund that he built into the world’s largest in terms of assets under management. Bridgewater announced on Thursday that the firm had promoted Karen Karniol-Tambour to the position of co–chief investment officer alongside Bob Prince and Greg Jensen.

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