Ray Dalio Quotes

Never underrate the importance of asset allocation.

I'm not a money manager, but I can tell you what the conventional wisdom is. The younger you are, the more risk you can take on.

Owning a variety of asset classes means that some part of your portfolio will be doing well when the cyclical turmoil arises. A broadly diversified portfolio includes large capitalization stocks, small cap, emerging markets, fixed income, real estate and commodities.

No one knows what the top-performing asset class will be next year. Lacking this prescience, your next-best solution is to own all of the classes and rebalance regularly.

Always keep your portfolio and your risk at your own individual comfortable sleeping point.

It is important for investors to understand what they do and don't know. Learn to recognize that you cannot possibly know what is going to happen in the future, and any investment plan that is dependent on accurately forecasting where markets will be next year is doomed to failure.

The real key to making money in stocks is not to get scared out of them.

We aren't going to let our first investment be the best.

I've found that when the market's going down and you buy funds wisely, at some point in the future you will be happy. You won't get there by reading 'Now is the time to buy.'

The last thing you want to do, unless it's a very unusual situation, is to invest money.

Investing is a business where you can look very silly for a long period of time before you are proven right.

I would never be 100 percent in stocks or 100 percent in bonds or cash.

If you are not making any mistakes, you are being excessively risk-averse. Investing involves risk, and that means you will occasionally be wrong. And although it is okay to be wrong, it is not okay to stay wrong.

I almost always recommend investors get fully invested, since it's better to put your money to work than to let it simply track the rate of inflation.

If the investor doesn't have enough time and skill to investigate individual stocks or enough money to diversify a portfolio, the right thing to do is to invest in exchange-traded funds that give you exposure to asset classes. It does make sense for the individual investor to think in terms of holding individual asset classes.

Well, there's always risk in long-term investment.

Unfortunately, slow and steady in any financial market is actually impossible.

Diversification has been, and balance, like Wellington, has been so drummed into me, it's part of my personality.

You just have to approach every day and say, 'If you were starting fresh today, what would my portfolio look like?' So that's how we think about it.

Regardless of what happens in the markets, stick to your investment program. Changing your strategy at the wrong time can be the single most devastating mistake you can make as an investor.

The beauty of periodic rebalancing is that it forces you to base your investing decisions on a simple, objective standard.

You could lose hundreds or thousands one day on paper and gain it all back the next, and it has literally no effect on your immediate future, provided the money you have in the market is money you're investing for the long haul (meaning at least three to five years).

Optimization tells us precisely how to diversify the portfolio, whether I should have 12% in semiconductors or 4% in biotech, etc., and it literally tells me how to diversify not only the industry groups but the stocks.

There's a tendency to look at investments in isolation. Investors focus on the risk of individual securities.

I like not to feel that all my eggs are in one basket, or I get nervous.