'There's Definitely a Bubble' In Markets, Ray Dalio Says. Here's His Latest Advice.

Core Viewpoint - Ray Dalio, founder of Bridgewater Associates, asserts that markets are "definitely" in a bubble, although the bubble has not yet been pricked [1][6]. Market Conditions - Major stock market indexes have recently declined, losing gains made after Nvidia's earnings report, which initially eased concerns about the AI rally [1][3]. - Dalio emphasizes that the bursting of a bubble is not triggered by a single company's performance but rather by a collective decision among investors to convert inflated asset values into cash [3][4]. Investment Recommendations - While Dalio does not advise selling due to the existence of a bubble, he suggests protective measures such as owning gold and reducing significant credit exposures [4][6]. - The current ratio of U.S. equity wealth to total money is comparable to historical peaks before major market crashes, indicating potential for low real returns in stocks over the next decade [4][5]. Future Outlook - GMO's 7-year forecast indicates negative real returns for U.S. large- and small-cap stocks as of the end of September, aligning with Dalio's predictions of minimal future stock appreciation [5][7].