Ray Dalio, the founder of Bridgewater Associates, just shared the biggest market trends of 2025 and what they mean for ordinary investors.
1. The US dollar kept losing value
Dalio noted that the dollar fell against many major currencies in 2025:
- 0.3% vs. the Japanese yen
- 4% vs. the Chinese yuan
- 12% vs. the euro
- 13% vs. the Swiss franc
- 39% vs. gold
When the dollar weakens, anything priced in dollars looks cheaper to foreign investors, and the opposite is true for foreign currencies.
2. Gold was the best‑performing asset
Holding gold gave investors about a 65% return in 2025. That beat the S&P 500, which only rose about 18% in dollar terms. In gold‑terms, the S&P actually fell 28%.
3. How a weak currency can distort returns
Dalio explained that the same investment looks different depending on the currency you measure it in. For example, the S&P 500 returned:
- 18% for investors using dollars
- 17% for yen‑based investors
- 13% for yuan‑based investors
- 4% for euro‑based investors
- 3% for Swiss‑franc investors
Because the dollar fell, the returns appeared larger to those using weaker currencies.
4. US stocks lagged behind foreign markets
Non‑US stocks outperformed US equities in 2025:
- European stocks beat US stocks by 23%
- Chinese stocks beat US stocks by 21%
- UK stocks beat US stocks by 19%
- Japanese stocks beat US stocks by 10%
Investors would have been better off holding non‑US equities, bonds, or cash rather than staying in US‑denominated assets.
5. Outlook for US productivity in 2026
Dalio expects US productivity to improve in 2026, but he warned that the new Fed chair may keep interest rates low, which could inflate asset bubbles.
6. Politics and the “value of money” issue
He said the political climate—especially policies from the Trump administration and growing wealth gaps—will keep markets and politics tightly linked. The biggest political battle next year could be the “affordability” issue, which may affect elections in 2027 and 2028.
Takeaway
For most retail investors, Dalio’s message is clear: consider diversifying away from a weakening dollar, think about gold as a hedge, and watch foreign markets for better growth opportunities.
Remember, this is perspective, not a prediction. Do your own research and consult a certified advisor before making any investment decisions.