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Yahoo
5 days ago
- Business
- Yahoo
Ray Dalio shares 3 trades to weather a US debt spiral
Ray Dalio is worried about a looming financial crisis sparked by spiraling US debt levels. The US faces a $2 trillion deficit and $1 trillion in interest payments this year. Dalio advises hedging against inflation with TIPS, gold, and bitcoin. Famed investor Ray Dalio is ringing the alarm on America's growing mountain of debt. The Bridgewater Associates founder has been warning about unsustainable deficits, likening the situation to a looming "financial heart attack" in a recent discussion of his new book "How Countries Go Broke: The Big Cycle." "It's like a plaque building up in the arteries," Dalio said of debt service during an event in New York on Thursday. "You can see interest rates and debt service payments starting to squeeze out other consumption." This year, the US is on track to bring in revenues of around $5 trillion and spend $7 trillion, contributing $2 trillion to the national deficit, Dalio said. On top of that, interest payments to service the debt will come out to $1 trillion. "We have to, in the next, year sell about $12 trillion. We have $1 trillion that we can pay in interest. We have $9 trillion in debt service in terms of principle, and then we have to sell another $2 trillion because we had a deficit," Dalio said. In order to return to financial health, the US must lower its budget deficit from 6.5% to 3% of GDP through a combination of cutting spending, increasing tax revenue, and lowering interest rates, Dalio said. That puts the US in a tough spot because all three parts of the solution are difficult and controversial — just look at DOGE, the ongoing debate over the Big Beautiful Bill, and Trump's feud with Jerome Powell — making it extremely hard to move to an actionable outcome. And with the US at risk of a recession, the debt situation could become even more severe since government borrowing tends to increase in times of economic downturn, Dalio said. Mounting debt creates a supply and demand problem where the government has to raise interest rates to make US debt attractive to investors or print more money. "When faced with the choice, they print money," Dalio said of governments. Luckily, there are some actions investors can take to protect their portfolio from the negative effects of mounting national debt and widening deficits. The most important things one can do are to hedge portfolios against inflation and diversify holdings, Dalio believes. "Look at the value of your portfolio in inflation-adjusted terms, not in nominal terms," Dalio told the audience. Dalio's a big fan of Treasury Inflation-Protected Securities (TIPS), which are government bonds that return more when inflation is high. It's the best investment vehicle for a middle-class American who's risk-averse and looking for inflation protection, in his opinion. "The safest investment that you can get right now is an inflation-indexed bond," Dalio said. "You'll get a bit over 2% of real return above inflation." Gold is another one of Dalio's top picks. The yellow metal has been a time-tested store of value, and it's no different today. Gold provides diversification, inflation protection, and a hedge against geopolitical risks. It's typically negatively correlated to other investments, meaning that it can perform well in times of economic downturn. "There's a saying that gold is the only asset that you can have that's not somebody else's liability," Dalio said. "It's a prudent thing to have somewhere between 10 or 15% of your portfolio in gold." And finally, a little bit of bitcoin can also bolster your portfolio. Dalio has changed his mind on bitcoin over the years, initially calling it a speculative asset and eventually owning a small amount himself starting in 2021. Read the original article on Business Insider Sign in to access your portfolio
Business Insider
5 days ago
- Business
- Business Insider
Ray Dalio shares 3 trades to weather a US debt spiral
Famed investor Ray Dalio is ringing the alarm on America's growing mountain of debt. The Bridgewater Associates founder has been warning about unsustainable deficits, likening the situation to a looming " financial heart attack" in a recent discussion of his new book "How Countries Go Broke: The Big Cycle." "It's like a plaque building up in the arteries," Dalio said of debt service during an event in New York on Thursday. "You can see interest rates and debt service payments starting to squeeze out other consumption." This year, the US is on track to bring in revenues of around $5 trillion and spend $7 trillion, contributing $2 trillion to the national deficit, Dalio said. On top of that, interest payments to service the debt will come out to $1 trillion. "We have to, in the next, year sell about $12 trillion. We have $1 trillion that we can pay in interest. We have $9 trillion in debt service in terms of principle, and then we have to sell another $2 trillion because we had a deficit," Dalio said. In order to return to financial health, the US must lower its budget deficit from 6.5% to 3% of GDP through a combination of cutting spending, increasing tax revenue, and lowering interest rates, Dalio said. That puts the US in a tough spot because all three parts of the solution are difficult and controversial — just look at DOGE, the ongoing debate over the Big Beautiful Bill, and Trump's feud with Jerome Powell — making it extremely hard to move to an actionable outcome. And with the US at risk of a recession, the debt situation could become even more severe since government borrowing tends to increase in times of economic downturn, Dalio said. Mounting debt creates a supply and demand problem where the government has to raise interest rates to make US debt attractive to investors or print more money. "When faced with the choice, they print money," Dalio said of governments. 3 trades for a debt spiral Luckily, there are some actions investors can take to protect their portfolio from the negative effects of mounting national debt and widening deficits. The most important things one can do are to hedge portfolios against inflation and diversify holdings, Dalio believes. "Look at the value of your portfolio in inflation-adjusted terms, not in nominal terms," Dalio told the audience. Dalio's a big fan of Treasury Inflation-Protected Securities (TIPS), which are government bonds that return more when inflation is high. It's the best investment vehicle for a middle-class American who's risk-averse and looking for inflation protection, in his opinion. "The safest investment that you can get right now is an inflation-indexed bond," Dalio said. "You'll get a bit over 2% of real return above inflation." Gold is another one of Dalio's top picks. The yellow metal has been a time-tested store of value, and it's no different today. Gold provides diversification, inflation protection, and a hedge against geopolitical risks. It's typically negatively correlated to other investments, meaning that it can perform well in times of economic downturn. "There's a saying that gold is the only asset that you can have that's not somebody else's liability," Dalio said. "It's a prudent thing to have somewhere between 10 or 15% of your portfolio in gold." And finally, a little bit of bitcoin can also bolster your portfolio. Dalio has changed his mind on bitcoin over the years, initially calling it a speculative asset and eventually owning a small amount himself starting in 2021.
Gulf Today
18-06-2025
- Entertainment
- Gulf Today
Bollywood star Pooja Hegde serves traditional elegance as ‘Kanjivaram Girl'
Actress Pooja Hegde has professed her love for Kanjivaram sarees and said that she is always a 'Kanjivaram girl.' Pooja took to Instagram, where she shared a string of images and clips from a recent photoshoot, where she wore an exquisite aubergine and gold hued saree. She completed her look with drop earrings, a choker and bangles. For the make-up, she went subtle with nude lips and left her long straight black hair open. She wrote: 'Once a Kanjivaram girl, always a Kanjivaram girl.' Kanjivaram sarees are renowned for their South Indian origin and are made from pure mulberry silk. They are heavy and have exquisite craftsmanship. On the work front, Pooja will next be seen next in 'Hain Jawani Toh Ishq Hona Hain,' which is being made under the direction of David Dhawan. With Varun Dhawan as the protagonist, the highly-anticipated drama enjoys a stellar cast including Mrunal Thakur, Mouni Roy, Chunkey Panday, Maniesh Paul, Jimmy Shergill, Rakesh Bedi, Ali Asgar, Kubbra Sait, Rohit Saraf, Rajeev Khandelwal, Nitish Nirmal, and Sreeleela, along with others. The title of the romantic-comedy-drama, 'Hain Jawani Toh Ishq Hona Hain' has been derived from the song 'Ishq Sona Hai' from Dhawan's 1999 hit 'Biwi No.1,' starring Salman Khan, Karisma Kapoor, and Sushmita Sen in the lead. Produced by Ramesh Taurani under the banner of TIPS, the release date for 'Hain Jawani Toh Ishq Hona Hain' has not been disclosed yet. Over and above this, Varun will once again be seen sharing screen space with Janhvi in Shashank Khaitan's 'Sunny Sanskari Ki Tulsi Kumari.' These two were earlier paired on-screen in the 2023 romantic entertainer, 'Bawaal'. Sanya Malhotra, Abhinav Sharma, Maniesh Paul, and Manini Chadha are also a part of the project's pivotal cast. Pooja was last seen in the romantic action drama film 'Retro' by Karthik Subbaraj. The film stars Suriya and Pooja in the lead roles. In the film, Paarivel 'Paari' Kannan, an orphan raised by a gangster, faces betrayal and a violent cult as he searches for his true origins, fulfils a prophecy, and tries to reunite with his lost love, Rukmini. Meanwhile, Pooja revealed her favourite homesick remedy. Being an actor means staying away from home for long periods of time, and everyone ends up inventing their own way of overcoming their feeling of being homesick. Through her latest Instagram post, actress Pooja Hegde shared that one of her favorite homesick remedies is to enjoy a hot cup of tea with some yummy Parle-G biscuits. The 'Retro' actress dropped a clip on her Instagram handle, where she was seen enjoying this beloved combo. She was heard saying in the background, 'Simple joys to make me feel like I am at home'. Indo-Asian News Service
Hans India
18-06-2025
- Entertainment
- Hans India
Pooja Hegde will always be a ‘Kanjivaram girl'
Actress Pooja Hegde has professed her love for Kanjivaram sarees and said that she is always a 'Kanjivaram girl.' Pooja took to Instagram, where she shared a string of images and clips from a recent photoshoot, where she wore an exquisite aubergine and gold hued saree. She completed her look with drop earrings, a choker and bangles. For the make-up, she went subtle with nude lips and left her long straight black hair open. She wrote: 'Once a Kanjivaram girl, always a Kanjivaram girl.' Kanjivaram sarees are renowned for their South Indian origin and are made from pure mulberry silk. They are heavy and have exquisite craftsmanship. On the work front, Pooja will next be seen next in 'Hain Jawani Toh Ishq Hona Hain,' which is being made under the direction of David Dhawan. With Varun Dhawan as the protagonist, the highly-anticipated drama enjoys a stellar cast including Mrunal Thakur, Mouni Roy, Chunkey Panday, Maniesh Paul, Jimmy Shergill, Rakesh Bedi, Ali Asgar, Kubbra Sait, Rohit Saraf, Rajeev Khandelwal, Nitish Nirmal, and Sreeleela, along with others. The title of the romantic-comedy-drama, 'Hain Jawani Toh Ishq Hona Hain' has been derived from the song 'Ishq Sona Hai' from Dhawan's 1999 hit 'Biwi No.1,' starring Salman Khan, Karisma Kapoor, and Sushmita Sen in the lead. Produced by Ramesh Taurani under the banner of TIPS, the release date for 'Hain Jawani Toh Ishq Hona Hain' has not been disclosed yet. She was last seen in the romantic action-drama film 'Retro' by Karthik Subbaraj. The film stars Suriya and Pooja in the lead roles. In the film, Paarivel 'Paari' Kannan, an orphan raised by a gangster, faces betrayal and a violent cult as he searches for his true origins, fulfils a prophecy, and tries to reunite with his lost love, Rukmini.
Yahoo
17-06-2025
- Business
- Yahoo
Fidelity: 7 Investments To Get To Inflation-Proof Your Portfolio
According to U.S. Labor Department data published on June 11, the annual inflation rate (measured by the consumer price index) for the U.S. was 2.4% for the 12 months ending in May. This was up 0.1% from the 12 months ending in April. Inflation remains much lower than it was at this time last year and has been hovering just above the Federal Reserve's target of 2% for several months. 'It was a very good report. Basically, it says inflation has finally gotten back to the Federal Reserve's annual inflation target,' Mark Zandi, chief economist at Moody's, told CNBC. However, many economists are predicting that President Donald Trump's tariff strategy may have a detrimental effect on inflation in the months ahead. 'I think it's the calm before the inflation storm,' Zandi told CNBC. 'This [report] still reflects the disinflation that began a few years ago and continued on through the month of May.' Read Next: Learn More: With consumer price and inflation worries constant and recession fears cooling but refusing to go away completely, it's a shrewd move to place some defensive investments in your portfolio. Here are seven ways that Fidelity recommended defending against inflation through diversifying your portfolio. Stocks can be negatively affected in the short term by sudden inflation increases or economic downturns. However, long-term equity investments have typically produced returns that are significantly higher than inflation, according to Fidelity. If you're invested for the long haul, don't hurry to change your financial plan. 'In a growing economy, companies that issue stock can grow earnings in real terms during inflationary environments by raising prices in response to higher input costs,' said Anu Gaggar, Fidelity's vice president of capital markets strategy. Find Out: Home country bias — the tendency to invest primarily in one's own country's companies — is a global phenomenon, but not all of the world's economies trend the same. If near-term U.S. prospects worry you, investing in emerging foreign markets can help spread out a portfolio over-dependent on U.S. stocks. 'Many U.S. investors have this misguided notion that the S&P 500 Index is the be-all and end-all of the stock market,' said Jeffrey Kleintop, Schwab's chief global investment strategist. 'But if you're not investing abroad, you're missing out on more than half the global market.' Fidelity cautioned, however, that international stocks can be more volatile. According to Fidelity, investors concerned about inflation could look into investing in Treasury Inflation-Protected Securities (TIPS), which are government bonds whose face value and interest rate payments rise and fall with inflation. According to TreasuryDirect, TIPS are available for five-, 10- and 30-year terms, and at the time of maturity, you'll get back either the original principal or an increased price based on inflation. However, you won't get a lower principal than what you paid. Although Fidelity pointed out that gold shouldn't occupy a significant part of your portfolio (because it doesn't pay out income through interest or dividends), it has a strong historical record as a broad inflation hedge in times of economic turmoil. However, although it's been a hot commodity recently, gold seems to perform best when inflation is significantly higher than it is now. For unexpected changes in the inflation rate, or shocks, it might be wise to look at other commodities. Commodities besides gold (agriculture, energy, metals, etc.) have proved to be extremely resilient to inflation and have been an important hedge for stocks and bonds during periods of rising prices and wages. According to Goldman Sachs Research, during inflation shocks, commodities returned real gains of 7 percentage points, compared with a decline of 3 and 4 percentage points for stocks and bonds, respectively. Like gold, real estate has proved to be a sought-after investment with significant protective and potentially lucrative value, per Fidelity. Having a fixed-rate home mortgage is a good hedge against inflation, but investing in income-generating real estate might be the best protection against rising prices. Investing in real income properties — through either directly purchasing single- or multi-family homes or passively investing in syndications sponsored by private equity firms — can increase your income as inflation and rents rise. Floating-rate loans can serve as a hedge against inflation because their interest rates vary along with current rates. Borrowers pay higher interest on loans as market rates rise, protecting their primary market value. This provides an edge over standard fixed-rate bonds, which typically see price losses as interest rates rise. 'Floating-rate debt has one of the best 'hit rates,' or historical odds, of outperforming inflation,' Gaggar said. More From GOBankingRates How Much Money Is Needed To Be Considered Middle Class in Every State? This article originally appeared on Fidelity: 7 Investments To Get To Inflation-Proof Your Portfolio Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
