When you’re Ray Dalio, you don’t ask ChatGPT questions—ChatGPT asks you questions. Well, kind of. The billionaire founder of the world’s largest hedge fund, Bridgewater Associates, fielded a question from OpenAI’s chatbot on his YouTube channel over the weekend—and it was a good one, if a little simplistic.
“What’s the most important lesson you’ve learned about investing throughout your career?” ChatGPT wrote, when prompted by a human to ask the famous investor a question.
Dalio’s response was also rather simplistic—diversification. The billionaire called the strategy that seeks to reduce portfolio risk by investing in a wide range of unrelated assets the “holy grail” for investors.
“A lot of people think that the way you make a lot of money is to come up with the best single, or few, bets. That’s wrong. That approach to the game will knock you out,” he said. “How do you diversify well to have a good return relative to your risk? That’s the most important principle.”
Dalio, who founded Bridgewater Associates in 1975, repeated one of his favorite lines in the video, arguing that investors should always remain humble and remember that “what you don’t know is greater than what you do know.”
This lack of certainty means it only makes sense to diversify into different asset classes like real estate, commodities, equities, and bonds. By diversifying into “10 or 15 good, uncorrelated investments,” investors can reduce their risk by as much as 80% without sacrificing returns, according to Dalio, who noted that “risk reduction is really key” to building wealth.
While it’s rare for a billionaire investor to dish out this kind of basic advice, passing on life lessons is nothing new for Dalio. His books—including Principles: Life and Work; Principles for Dealing With the Changing World Order; and Principles: Your Guided Journal— are filled with tips on how to navigate the complexities of life and investing. And Dalio has leaned into his role as an educator after transitioning control of Bridgewater Associates to the fund’s co-CEOs, Nir Bar Dea and Mark Bertolini, last year, amassing nearly 2.2 million followers on his YouTube channel.
Principles by Dalio, as he calls it, features everything from life tips for 40- and 50-year-olds to discussions of the changing world order and the rise of China after COVID. But you might not need Dalio’s new channel at all if A.I. Chatbots keep developing.
The hedge funder believes the latest A.I. Tech is just “the tip of the iceberg,” and soon “you’ll get better advice out of your device than from your own thoughts” or any expert. That means when it comes to future investing questions: “I suspect you can probably get an equally good answer from ChatGPT,” the billionaire said.
