My Words on Ray Dalio’s Call for Lost Decade
Did you watch Bloomberg’s interview with Ray Dalio? In his words, he made it clear that we might be entering a period where people who invested in the stock market will not make profit until the year 2030. Ray Dalio isn’t a baby investor, he is a billionaire hedge fund manager and a notable voice in the world of investing but this time, he is very skeptical about investing for profit in the next 10 years. This is not the first time such would occur so it shouldn’t look like something impossible. Investing before the dotcom bubble crash is a very good example, it took internet companies about 12 years to make profit. Also in 1929, something similar happened when if you invested money in the stock market, it took 30 years to make profit.
It can be a bad investment to invest for ten years only to make profit over the initial capital and Ray says a few things can cause this to happen.
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Lower profit margin
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Cost in reconstruction
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Corporate debt due to the pandemic
It is true that these things are the major reason for a crash and a long to be precise but how can we get out of this and still make profit. Let me make it clear that things will not remain the same again and there will be redistribution of wealth.
What I think about Ray Dalio’s Predictions
Since this is not the first time we will be experiencing a drop for over a decade in the stock market, I wouldn’t say it is impossible to have 10 years of down market before hitting the high it got before the pandemic. Warren Buffett said also that the market isn’t a place to rush in to buy at this period. It was gathered that he hasn’t bought any stocks this year but rather has been selling off stocks. The market is currently a political ground and is being pumped by government funds and debt. Corporations will surely experience low revenues and this means that a lot of investors might not get dividends on investment and at this point the market will still remain low. Also, a lot of companies have been running on debt as they lose money and still have to pay for maintenance, the only sort out solution is going into debt. Which the government is giving out and surprisingly, a lot of this companies are pumping the money into the stock market not considering revenue. A lot of companies would fold up and so many will still have their stocks devalued. It is no doubt that the market might be down for a very long time coupled with the fact that there is no vaccine for the current virus.
What is your take on Ray Dalio’s Predictions?
A lot of us have different thoughts and see the market differently. It will be good if you can share your thoughts on the market in the next 10 years. Do you think the market will go back to normal or not?
You can read more about Ray Dalio call for lost decade here
https://www.ccn.com/ray-dalio-calls-for-lost-decade-in-stocks-heres-why-hes-wrong/
https://www.marketwatch.com/story/investors-face-a-lost-decade-in-the-stock-market-according-to-this-warning-from-the-worlds-biggest-hedge-fund-2020-06-18
https://www.bloomberg.com/news/articles/2020-06-18/dalio-s-bridgewater-warns-of-possible-lost-decade-for-stocks
