Ray Dalio & Bridgewater Foundation

In the spring of 2007, when the financial market was booming and improving, a fund company began to worry about the financial risks that excessive financial leverage might bring.

This fund company is the famous Qiaoshui Fund.

At the time, the Bridgewater Fund counted public reports from top institutions around the world and predicted that future debt that would be bad debts would reach a staggering $839 billion.

In December 2007, Bridgewater founder Ray Dalio sent his analysis to the US Treasury and White House economic advisors, but they were all ignored.

As a result, the stock market crash in 2008 and the subsequent acceleration of the Federal Reserve's banknote printing came true to Dario's predictions.

As a result of planning ahead, the Qiaoshui Fund survived the 2008 stock market crash. Its flagship fund, Pure Alpha Fund, rose 9.5% that year. The S&P 500 index plummeted 38% during the same period, and most investment institutions suffered significant losses.

Ray Dalio was born in New York on August 8, 1949. He is the son of jazz musician Marino Dailio.

At age 12, he was exposed to many of the biggest names on Wall Street, including Gorge Leib of Link's Club, as a caddie at a golf club.

One summer vacation, Gorge's son gave Dalio a chance to work for his trading company, and since then Dario has been fascinated by investing.

Dario, who was only a teenager at the time, spent $300 to buy shares of Northeast Airlines. After the company merged with Delta Air Lines, its stock price quickly tripled.

Over the next few months, he took more of his capital from his piggy bank into the market and reinvested the money he earned.

Before Dario went to high school, he had amassed a “small fortune” — a stock account worth thousands of dollars.

Later, Dalio attended Long Island University and Harvard University, and obtained a bachelor's degree in finance and a master's degree in business administration.

In 1975, Dario founded Bridgewater from his two-bedroom apartment in New York City.

At first, Qiaoshui was a consulting firm that answered questions about capital management and investment risk control for the company, and later became a hedge fund.

The Bridgewater Fund made significant gains from the 1987 market crash, which earned Dalio a reputation in the financial world.

Since then, Qiaosui has attracted a number of well-known major customers, such as McDonald's, World Bank (1985), and Kodak (1989).

In 2013, Bridgewater Fund became the largest hedge fund in the world.

Dario mainly uses a top-down approach to investment analysis. Investment targets are determined by comprehensively studying various “global macro” factors such as inflation, interest rates, and GDP growth. As a result, he is known as an investor who is good at “taking a bird's eye view of the financial markets.”

In actual market transactions, Dario would turn his macroscopic observations into specific algorithms and apply them.

“The New Yorker” once described Dario as “a big-picture thinker and a street-smart trader.”

Dario pioneered and popularized some of the investment ideas and methods that the financial world still uses today.

These include risk parity, transferable alphas, etc.

Bridgewater's flagship fund, Pure Alpha Fund (Pure Alpha Fund), was launched in 1991. Its investment philosophy is to find fully diversified and transferable Alfa by investing in different types of assets based on risk balance.

During the market downturn from 2000 to 2003, this strategy achieved good results, and the return greatly exceeded the performance of the index.

The All-Weather Fund (All-Weather Fund), founded in 1996, was the first fund founded based on a risk-parity investment concept.

The starting point of an all-weather fund is to mitigate the risk of individual stocks through diversified investment and minimize risk under a given expected return level.

By leveraging low-risk assets and deleveraging high-risk assets, the expected return and risk of all types of assets can basically reach the same level. Then, through diversification, the Sharp ratio of the new portfolio (that is, the additional benefit obtained by each additional unit of risk taken by investors) is better than traditional investment portfolios.