Bridgewater Associates founder Dalio issued a strong warning: the combined forces of fiscal deficit, wealth disparity, political division, geopolitical restructuring, and the impact of AI will lead to "immense turmoil" in the United States over the next five years, potentially altering the face of the entire world. He advises investors to keep their gold allocation between 5% and 15% to hedge against chaos.

Written by: Zhao Ying

Source: Wall Street Journal

Bridgewater Associates founder Dalio warns that the United States is entering a period of "immense turmoil," with multiple structural forces deeply reshaping the country and the world in the next five years.

In a podcast on the 7th, Dalio stated that the enormous fiscal deficit, widening wealth gap, political division among left and right, regional geopolitical restructuring, and the disruptive impact of artificial intelligence will collectively drive the formation of this turmoil.

"All these forces are converging, and there will be tremendous changes in the next five years," he said, "and after that, the world will be almost unrecognizable, greatly changed; it will be an era filled with significant change and severe turmoil."

For investors, Dalio recommends maintaining a gold allocation ratio of 5% to 15% in their portfolios, as historical patterns show that during similar tumultuous periods, all fiat currencies will depreciate while gold will rise.

Political Conflicts May Escalate After Midterm Elections

Dalio expressed deep concerns about the stability of American society and political systems, explicitly mentioning potential risks of violent conflict.

He predicts that the Republican Party may lose control of the House of Representatives in the midterm elections, and this outcome will become a turning point for further escalation of political and social conflicts. "From that point on, you will see the intensity of political and social conflict continuously rise, especially between that election and the 2028 presidential election."

On the international level, Dalio believes that the rules-based international order no longer exists. He described the direction of the U.S.-Iran war as a choice that is "almost black or white"—the core question is who will control the Strait of Hormuz and who will control nuclear material. This judgment indicates that geopolitical risks have evolved from ambiguous games into more direct strategic confrontations.

Gold Becomes the Preferred Choice in Turbulent Times, Diversified Allocation is the Key

In response to the aforementioned risks, Dalio provided clear asset allocation advice: maintain a highly diversified investment portfolio, keeping the gold position between 5% and 15%. He cited historical experience, pointing out that in such turbulent times, all fiat currencies invariably weaken, while gold plays a core role as a store of value.

Meanwhile, Apollo Global Management CEO Marc Rowan also issued a warning, stating that the world is facing "massive geopolitical restructuring," a trend that will lead to the rise of the blue-collar class while the white-collar group will bear greater pressure. The simultaneous warning from these two industry heavyweights further highlights the current market's heightened concern over macro uncertainties.