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

Ray Dalio credits his investing principles and transcendental meditation — to some extent — for the extraordinary success that he achieved. 

Here we give a lowdown on some of the key investing principles:

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

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

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

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

Once he collected them, he tried to make sense of the market on his own. From thereon, he developed a unique management style which is independent and unique. 

Investing in sectors you know of: He believes that investing is risky regardless of which sectors you choose to invest in. 

One of the easiest ways to make investing less risky is to opt for the sectors that you are well acquainted with.    

Avoid being reactive: A lot of investors make investment decisions based on the trajectory that the markets are taking. Usually, investors invest in the rising stock and sell in the falling. 

But it is obviously not healthy advice since a company whose stock is down may be trading at an attractive valuation, and vice versa. 

Bringing risk lower: Ray Dalio is known to be conscious of the inherent risks that investing carries. 

It is believed that Bridgewater Associates became the largest fund house because of the unique way in which Dalio ran it. He makes sure to minimise the risk by diversifying his investment so that it is not a complete loss regardless of which way the market moved. 

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Updated: 04 Nov 2023, 10:46 AM IST