Out of all the opinions out there heading into 2012, the only one that might be worth actually listening to is Bridgewater’s. That’s the world’s largest hedge fund run by Ray Dalio. Dalio has racked up enormous returns over the years using a global macro approach. The strategists at BW are not entirely optimistic heading into 2012, but still find value in gold and treasuries (via the WSJ):
“Robert Prince, co-chief investment officer at Bridgewater, and his managers at the world’s biggest hedge fund firm are preparing for at least a decade of slow growth and high unemployment for the big developed economies. Prince describes those economies—the US and Europe, in particular—as “zombies” and said they will remain that way until they work through their mountains of debt.
“What you have is a picture of broken economic systems that are operating on life support,” Prince said. “We’re in a secular deleveraging that will probably take 15 to 20 years to work through and we’re just four years in.”
In Europe, “the debt crisis is [a] long ways from over,” he said. The economic and financial morass will mean interest rates in the US and Europe will essentially be locked at zero for years.
In this bleak environment, Prince said stocks remain vulnerable to “air pockets” from shocks, such as bad news out of Europe. But for longer-term investors looking out over the next decade, he said, equities may be a good buy. There is even money to be made in US Treasurys, despite interest rates near record lows, and gold is likely to resume its climb as central banks print money to bolster their economies, Prince said.”
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.
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