Investing mantras: 5 key money lessons investors can learn from Ray Dalio of Bridgewater Associates

Ray Dalio, founder of Bridgewater Associates, is an accomplished investor and self-made billionaire. He started investing in stocks before he was a teenager. Before entering high school, he had already created an investment portfolio running into thousands of dollars.

Ray Dalio he credits his investment principles and transcendental thinking — to a certain extent — for his phenomenal success.

Here we outline some of the key investment principles:

Build your own success: Ray Dalio was not a big fan of the school and in fact, he hated it. So, he thought of achieving his own success.

He did odd jobs such as mowing lawns, shoveling snow and delivering newspapers. At the beginning of his investment career, he bought shares of Northeast Airlines for $300 at the age of 12, and tripled his investment after the company merged with another company.

This is how he realized that he could get anything he wanted by working for it.

Building independent opinions: As a child, he used to cut out coupons and exchange them for the annual reports of Fortune 500 companies.

When he collected them, he tried to make sense of the deal on his own. From there, he developed a unique and independent management style.

Invest in sectors you know: He believes that investing carries risk regardless of the sectors you choose to invest in.

One of the easiest ways to invest less risk is to choose sectors that you know.

Avoid being reactive: Many investors make investment decisions based on the way the markets are doing. Usually, investors invest in the rising stock and sell the fall.

But it is clearly not sound advice since a company whose stock has declined may be trading at an attractive valuation, and vice versa.

Bringing lower risk: Ray Dalio knows the inherent risks of investing.

Bridgewater Associates is believed to have become the largest fund house because of the unique way Dalio ran it. He ensures to minimize the risk by diversifying his investment so that it is not a total loss no matter which way the market moves.

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Updated: 04 November 2023, 10:46 AM IST

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