Billionaire, investor, hedge fund manager, and legend in the financial world, Ray Dalio is a Wall Street force to be reckoned with. As the former co-chief investment officer of Bridgewater, the world’s largest hedge fund, it’s safe to say that having founded the company, Dalio is someone well worth listening to when he talks about the financial world. 

The author of the 2017 book Principles: Life & Work, Dalio frequently discusses corporate management and investment philosophy, and he has plenty of street credibility to discuss these subjects. Dalio has long had his own unique investment strategies, including his well-known “beta” and “alpha” investment styles, which have undoubtedly helped him become one of the world’s wealthiest individuals. 

10. “The biggest mistake investors make is to believe that what happened in the recent past is likely to persist. They assume that something that was a good investment in the recent past is still a good investment.” 

• Source: Ray Dalio 

Takeaway: Avoid Recency Bias

Dalio appears to be arguing against the recency bias or the notion that current trends will continue indefinitely. Instead, Dalio suggests that just because an investment has performed well historically doesn’t mean it will continue to perform well in the future. In other words, don’t assume previous winners will remain winners. 

9. “When growth is slower than expected, stocks go down. When inflation is higher than expected, bonds go down. When inflation is lower-than-expected, bonds go up.” 

• Source: Ray Dalio

Takeaway: Don’t React Too Quickly

The bottom line for any retiree is not to react too quickly, as any decisions you make based on market reactions could lead to losing money. Any of these three instances can lead to differences in how the market reacts, and it’s essential to understand these so you can make your investment decisions based on recognizing what happens if an inflation report comes in lower than expected, for example. 

8. “Because most people are more emotional than logical, they tend to overreact to short-term results; they give up and sell low when times are bad and buy too high when times are good.” 

• Source: Ray Dalio, Principles: Life and Work

Takeaway: Don’t Get Emotional

Whether you are a retiree or a new investor, this quote from Ray Dalio will be applicable across the board. The bottom line is not to panic-sell at low prices, and the same goes for markets that grow too fast as people buy at inflated prices. In other words, Dalio doesn’t want to see retirees or other investors make investment decisions based on emotion but more about thinking long-term. 

7. “Recognize that 1) the biggest threat to good decision making is harmful emotions, and 2) decision making is a two step process (first learning and then deciding).” 

• Source: Ray Dalio, Principles: Life and Work

Takeaway: Two-Step Decision Process

As is a theme with Ray Dalio’s quotes, this statement reminds retirees not to let emotions cloud investment decision-making, leading to bad decisions. The biggest takeaway is that you should follow Dalio’s two-step decision process, which will help keep emotions out of any investment decision-making and ensure bigger returns in the long run. 

6. “What I’m trying to say is that for the average investor, what I would encourage for them to do is to understand that there’s inflation and growth. It can go higher and lower and to have four different portfolios essentially that make up your entire portfolio that gets you balanced.” 

• Source: Ray Dalio 

Takeaway: Have Different Portfolios 

For any retiree, it’s essential to have a mix of investments to help offset any market volatility, which Dalio hints at with this quote. As both inflation and growth can move up or down, you need to prepare for all eventualities as an investor, so you should have a mixed portfolio that can help offset all kinds of economic climates. This is often called the “All Weather” portfolio. 

5. “If you’re not failing, you’re not pushing your limits, and if you’re not pushing your limits, you’re not maximizing your potential.” 

• Source: Ray Dalio

Takeaway: Keep Pushing Yourself

While this quote doesn’t have much to do with investing, every retiree should heed its advice all the same. The bottom line is that you’re never too old to learn that you are staying too close to your comfort zone if you are not failing. Retirement is a great time to get uncomfortable and do different things that you might not have done earlier in your life while working, raising a family, and preparing for the future. 

4. “If you are not aggressive, you are not going to make money, and if you are not defensive, you are not going to keep money.” 

• Source: Ray Dalio

Takeaway: Stay Aggressive 

A definite balance is required between taking risks and protecting everything you have already made. Dalio knows you must take risks in your life, as it’s how he made his fortune. However, he is also well versed in not only playing defense. You could lose everything if you try to do nothing more than protect what you have already made. The bottom line with this quote is that retirees should know to take risks with their money and have a strategy to keep the winnings. 

3. “Listening to uninformed people is worse than having no answers at all.” 

• Source: Ray Dalio

Takeaway: Don’t Act On Bad Information 

When you are a hopeful retiree, this quote should remind you to be careful about where you get financial advice. If you act on bad information from a friend, the media, or an unknown financial advisor, it can lead to costly mistakes that could negatively impact how much money you have to live on for retirement. The biggest flag for a hopeful retiree is to be careful about who you trust your money with, as lousy advice can have disastrous consequences. 

2. “The consensus is often wrong, so I have to be an independent thinker. To make any money, you have to be right when they’re wrong.” 

• Source: Ray Dalio

Takeaway: Independent Thinking Is Important

For hopeful retirees, it’s important to remember that following the crowd isn’t always the most innovative financial strategy. There will be instances where popular financial advice doesn’t necessarily align with your financial goals. The most successful investors often utilize independent thinking and don’t necessarily follow the crowd. In other words, just because everyone is doing something doesn’t mean you have to do it. 

1. “Look for people who have lots of great questions. Smart people are the ones who ask the most thoughtful questions, as opposed to thinking they have all the answers. Great questions are a much better indicator of future success than great answers.” 

• Source: Ray Dalio, Principles: Life and Work

Takeaway: Seek Advice From The Right People

This important Ray Dalio quote should remind all hopeful retirees to seek advice, financial or otherwise, from those who are thoughtful about their answers and not those who claim to have all the answers. Financial decisions, especially when you are getting close to retirement, require significant thought and should lead you to make sure you are asking the right questions.

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