Ray Dalio

Raymond Thomas Dalio (born August 8, 1949) is an American billionaire and hedge-fund manager, who has been co- chief investment officer of Bridgewater Associates since 1985. He founded Bridgewater in 1975 in New York.

Dalio was born in New York City and attended C.W. Post College of Long Island University before receiving an MBA from Harvard Business School in 1973.

In 2013, Bridgewater was listed as the largest hedge fund in the world.

Dalio is the author of the 2017 book, '' Principles: Life & Work'', about corporate management and investment philosophy.
As of December 2024, Dalio ranks #124 on Forbes' ''Richest People in the World'' with a net worth of $15.4 billion.

Early life and education

Dalio was born in the Jackson Heights neighborhood of New York City's Queens Borough. When he was 8, his family moved from Jackson Heights to Manhasset in Nassau County, Long Island, New York. He is the son of a jazz musician, Marino Dallolio (1911–2002), and Ann, a homemaker. He is of Italian descent.

He attended Herricks High School.

He received a bachelor's degree in finance from C.W. Post College of Long Island University. After graduating from C.W. Post College, Dalio worked as a clerk on the New York Stock Exchange.

He received an MBA from Harvard Business School in 1973.

Investment career

During his time at Harvard, Dalio and his friends created the company that later became Bridgewater Associates. Its goal was to trade commodities. The venture yielded little fruit. Dalio later used the name Bridgewater for his hedge fund.

After graduating from Harvard, Dalio moved to Wilton, Connecticut, where he traded out of a converted barn. He then worked on the floor of the New York Stock Exchange and traded commodity futures. He later worked as the Director of Commodities at Dominick & Dominick LLC. In 1974, he became a futures trader and broker at Shearson Hayden Stone, a securities firm run by Sandy Weill, who later became famous for building up Citigroup. At the firm, Dalio's job was to advise cattle ranchers, grain producers, and other farmers on how to hedge risks, primarily with futures. Dalio was fired from Shearson Hayden Stone after punching his boss in the face while drunk at a New Year's Eve party in 1974.

Founding of Bridgewater Associates

In 1975, he founded Bridgewater Associates. Bridgewater started out as a wealth advisory firm, which served numerous corporate clients, mostly retained from Dalio's job at Shearson Hayden Stone. The company began publishing a paid subscription research report, ''Daily Observations'', in which it analyzed global market trends. Dalio's big break came when McDonald's signed on as a client of his firm. Bridgewater then began to grow rapidly. The firm signed on larger clients, including the pension funds for the World Bank and Eastman Kodak. In 1981, the firm opened an office in Westport, Connecticut, which was where Ray and his wife wanted to start a family. Dalio started to become well known outside of Wall Street after turning a profit from the 1987 stock market crash. In 1991, he launched Bridgewater's flagship strategy, "Pure Alpha", a reference to the Greek letter that, in Wall Street terminology, represents the excess returns a money manager can create above a particular market benchmark, such as the NASDAQ. In 1996, Dalio launched ''All Weather'', a fund that pioneered a steady, low-risk strategy that later became known as risk parity.

Rise to prominence

Bridgewater Associates became the world's largest hedge fund in 2005. In 2007, Bridgewater predicted the 2008 financial crisis, and in 2008, Dalio published "How the Economic Machine Works: A Template for Understanding What is Happening Now", an essay assessing the potential of various economies by various criteria.

In 2011, Dalio self-published a 123-page volume, ''Principles'', that outlines his philosophy of investment and corporate management. In 2012, he appeared on the annual ''Time'' 100 list of the 100 most influential people in the world. In 2011 and 2012, ''Bloomberg Markets'' listed him as one of the 50 Most Influential people.

The Teacher Retirement System of Texas (TRS) purchased a stake in Bridgewater Associates Intermediate Holdings, LP, for $250 million in February 2012. This stake was non-voting and thus provided the pension fund with very little control of corporate governance. ''Institutional Investor's Alpha'' ranked Dalio No. 2 on its 2012 Rich List. Dalio has controlled Bridgewater Associates alongside co-chief investment officers Bob Prince and Greg Jensen since its inception.

Dalio was co-CEO of Bridgewater for 10 months before announcing in March 2017 that he would step down as part of a company-wide shakeup by April 15.

Investment philosophy

According to Dalio, Bridgewater Associates is a "global macro firm", investing around economic trends, such as changes in exchange rates, inflation, and G.D.P. growth. Dalio has said he divides his holdings into two different areas: beta investments and alpha investments.Brewster, Deborah (January 8, 2008) ''The alpha and beta of a lone manager'', Financial Times. Beta investments produce returns through passive management and normal market risk. Alpha investments are actively managed and aim to generate better returns than beta investments. Alpha investments are not related to the general market. Dalio's goal is to structure portfolios with uncorrelated investment returns based on risk allocations rather than asset allocations. Dalio's hedge fund mostly accepts money from institutional clients such as pension funds, foundations, endowments, and central banks. Private investors can rarely invest in Dalio's holdings.

According to Dalio, his strategy mainly focuses on currency and fixed income markets. This is in contrast to buying individual shares in companies, like investors such as Warren Buffett and Peter Lynch. Dalio also popularized the risk parity approach, which he uses for risk management and diversification within Bridgewater Associates. Dalio employs an investment strategy that blends conventional diversification with "wagers on or against markets around the world", according to Bloomberg. Dalio's risk parity approach allows for both leverage and external diversification when investing, as well as short selling. This allows Dalio to use any asset combination he chooses when investing. Dalio's strategy uses an optimal risk target level as its basis for investing. This is in contrast to first allocating capital and then achieving a risk target. Dalio implements this strategy by using leverage to evenly distribute exposure across various asset classes while maintaining the best risk target level. Dalio began using the term "d-process" in February 2009 to describe the deleveraging and deflationary process of the subprime mortgage industry as distinct from a recession, and subsequently incorporated the term into his investment philosophy.Ward, Sandra (February 9, 2009
"Recession? No, It's a D-process, and It Will Be Long"
''Barron's''. Retrieved March 18, 2010 Dalio's exact investment portfolios are largely kept a secret from the outside world. This includes most employees, as well as external investors, and only a dozen people within his firm understand how it trades at a given time.

Controversy

A November 2023 ''New York Times'' investigative report, based on the book by the paper's finance journalist Rob Copeland, raised questions about claims that Dalio and the fund had made about its investment philosophy and investment methodology. For example, the report indicated that the fund's investments are based largely on Ray Dalio's own picks, not by the sophisticated investment system that Dalio and the firm had touted; and that investment choices are driven by insider information, legally obtained, derived from Dalio's personal associations with prominent government actors. Dalio's lawyers threatened a multibillion-dollar lawsuit against the publisher MacMillan over what they allege is an inaccurate portrayal of the firm and Dalio.

Views

Capitalism and inequality

While Dalio has stated that capitalism is generally the best economic system, he has argued that it needs to be reformed due to it "not working well for most Americans". On April 7, 2019, Dalio said on ''60 Minutes'' that income inequality in the United States was a national emergency requiring reform. In July 2019, he again called for the refinement of capitalism and called wealth inequality a national emergency. In November 2019, he posted a blog entry stating that excess capital, unfunded social liabilities, and government deficits had created a recipe for disaster in what he called a "paradigm shift". In May 2020, he stressed the importance of reforming capitalism, not abandoning it, saying: "As the current crisis unfolds, we should remember that throughout history, capitalism has proven to be the best system, though it can sometimes be highly flawed." In October 2020, Dalio said that there has been little income growth for average citizens over the preceding two decades, with the bottom 60% of workers having no inflation-adjusted income growth since the 1980s. He mentioned that income inequality was at its highest level since the 1930s, when the top 1% of earners had more wealth than the bottom 99% combined.

In April 2025, Dalio warned about "something worse than a recession" for the U.S. economy and a "monetary order breakdown" globally. He also criticized the Trump administration's policy on tariffs.

China

In October 2020, Dalio cautioned people to not be blind to China's rise, arguing that it had continued to emerge as a global superpower. He claimed that China had succeeded in "exceptional ways", including high economic performance in spite of the COVID-19 pandemic, some of the lowest COVID-19 case rates, and being the center of half of all listed initial public offerings globally. Dalio asserted that when he visited China in 1984, high-ranking officials would marvel at basic technology such as calculators, calling them "miracle devices". He argued that China was now on par with the U.S. in advanced technologies and would probably take the lead in the next five years. Dalio has also downplayed and denied Chinese human rights violations, instead likening the Chinese government to a "strict parent," with such stances garnering criticism.

Principles

To follow the 2017 ''New York Times'' bestseller '' Principles: Life & Work,'' Dalio published an illustrated version in 2019 called ''Principles for Success.'' Dalio also published ''Principles for Navigating Big Debt Crises'' in 2018 and '' Principles for Dealing with the Changing World Order'' in 2021''.''

In 2021, Dalio produced a free online personality assessment called ''PrinciplesYou.''

Personal life

Family

Dalio lives with his wife Barbara, a descendant of sculptor Gertrude Vanderbilt Whitney, in Greenwich, Connecticut. They have four sons. Their oldest son, Devon, died in an automobile accident in 2020 at age 42. Their second son, Paul Dalio (born 1979), is a film director.

Health

Dalio has suffered from Barrett's esophagus, a form of gastroesophageal reflux disease (GERD), a pre-malignant condition that if not treated properly can lead to cancer.

Wealth

In 2014, he reportedly earned $1.1 billion, including a share of his firm's management and performance fees, cash compensation and stock and option awards. In 2015, ''Forbes'' estimated his net worth at $15.4 billion, making him the second-wealthiest hedge fund manager after George Soros. In 2018, Dalio was estimated to have personally received $2 billion in compensation for the year, after his fund posted a 14.6% return. In March 2019, ''Forbes'' named Dalio one of the highest-earning hedge fund managers and traders.

According to ''Forbes'', Dalio has an estimated net worth of $20 billion as of January 21, 2022, ranking him 88th on their billionaires list and 36th on the Forbes 400 list. In January 2022, ''Bloomberg News'' reported Dalio's net worth as $15.7 billion, making him the world's 123rd-richest person, according to their rankings.

Philanthropy

Overall, the Dalio family has donated more than $5 billion to his Dalio Foundation, and the foundation has given out more than $1 billion in charitable grants. In April 2011, Dalio and his wife joined the Giving Pledge, vowing to donate more than half his fortune to charitable causes within his lifetime.

Dalio has sat on NewYork–Presbyterian Hospital's board of trustees since 2020. In February 2020, the Dalio Foundation donated $10 million to support China's coronavirus recovery efforts in response to the COVID-19 pandemic. In March 2020, the foundation gave $4 million to the state of Connecticut to fund healthcare and nutrition. On October 13, 2020, NYP launched the Dalio Center for Health Justice with a gift of $50 million.

The foundation has supported the Fund for Teachers, David Lynch Foundation, National Philanthropic Trust, and TED's Audacious Project. Dalio's research yacht and submarine have appeared on the Discovery Channel during Shark Week and have been used to hunt for a giant squid. In 2018, OceanX, an initiative of the Dalio family, and Bloomberg Philanthropies committed $185 million over four years to protect the oceans. In 2019, he pledged $100 million to Connecticut public schools.

Dalio has backed the Volcker Alliance, the public policy group headed by former Federal Reserve chair Paul Volcker.

Hobbies

Dalio practices Transcendental Meditation. He is an avid outdoorsman, and has hunted cape buffalo, grouse, elk, and warthog. Dalio is also fond of bowhunting.

Published works

*''How the Economic Machine Works; A Template for Understanding What is Happening Now'' is Dalio's first book, published in 2007''.''
*'' Principles: Life & Work'' is Dalio's second book, published in 2017 by Simon & Schuster. It was a ''New York Times'' #1 bestseller and Amazon's #1 business book of 2017. CNBC listed ''Principles'' among the 13 Best Business Books of 2017.
*''Principles for Navigating Big Debt Crises'' is Dalio's third book, published in 2018.
* '' The Changing World Order: Why Nations Succeed and Fail'' was published in 2021.
* ''How Countries Go Broke, Principles for Navigating the Big Debt Cycle, Where We Are Headed, and What We Should Do'', to be released in 2025

References

External links

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{{DEFAULTSORT:Dalio, Ray
1949 births
American billionaires
American commodities traders
American derivatives traders
American financiers
American hedge fund managers
American investors
American money managers
American people of Italian descent
American stock traders
Businesspeople from Greenwich, Connecticut
21st-century American philanthropists
Harvard Business School alumni
Long Island University alumni
People from Jackson Heights, Queens
Stock and commodity market managers
Living people
American business writers
Chief investment officers
Bridgewater Associates people