In this article, we will be looking into the 10 Best Stocks to Buy, According to Billionaire Ray Dalio.
Ray Dalio, with over 50 years of experience, is arguably one of the most influential investors on Wall Street. Having accurately predicted the 2008 financial crisis, he is often looked upon for insights and the direction the market will likely take in times of uncertainty. He is the brains behind Bridgewater Associates, a hedge fund he founded in 1973, which leverages various strategies, including Pure Alpha and macroeconomic analysis, to squeeze optimum returns in the markets.
While Dalio gave up his CEO role at Bridgewater Associates in 2017, his sentiments still influenced the hedge fund’s investment strategy and play. Likewise, the hedge fund has remained on top of its game, generating an average return of 11.5% annually while leveraging the Pure Alpha Strategy.
READ ALSO: Paul Singer’s Latest Portfolio: Top 10 Stock Picks and 10 Best Stocks to Buy According to Seth Klarman.
The outperformance comes as the overall equity market has been in an uptrend amid the artificial intelligence-driven run. Likewise, the US economy staying clear of recession amid high interest has bolstered sentiments about market risk-taking.
Even though the overall equity market has been in an uptrend, billionaire Ray Dalio is sounding the warning bells about an imminent debt crisis. The fact that the US debt-to-GDP ratio has risen to over 122% poses significant risks, according to the founder of Bridgewater Associates.
Over the last two quarters, GDP has been gradually increasing, and unemployment and inflation have been relatively stable. However, Ray Dalio has warned that America’s national debt is a problem that is imminently coming and that it will rock the boat. According to Dalio, the US deficit must drop from a projected 7.2% of gross domestic product to about 3% of GDP.
“We have a very severe supply and demand problem. Some people think we’ll handle it because we’ve handled it so far. I don’t think they understand the mechanics of debt.” Dalio said
Dalio’s caution comes as President Donald Trump’s administration struggles to retain significant tax cuts while simultaneously cutting the annual deficit, which most recently hit $1.8 trillion.
According to Dalio, President Trump has undoubtedly shown that he is not afraid to use economic pressure to further his objectives. An examination of his executive orders since assuming office is sufficient proof that he has what it takes to reduce the US deficit and heightened debt levels.
However, the Oval Office might have lost some of its goodwill with the countries that would have hurried to its aid by inflicting pain through trade tariffs. Uncertainty around trade policy has exacerbated investor anxiety on Wall Street as they worry about how a potential trade war will affect the world economy.
Tariffs against Canada, Mexico, and China are part of Trump’s trade policies, which are intended to rebalance the economy to America’s advantage. Nevertheless, they have the potential to trigger an economic slowdown and higher inflation.
Even as Dalio remains concerned about the US debt levels and the uncertainty triggered by trade wars, he remains bullish about the US equity markets. Bridgewater Associates’ portfolio has significant exposure to tech stocks as it looks to benefit from the AI spectacle.
Our Methodology
To make the list of the 10 Best stocks to buy, according to billionaire Ray Dalio, we selected the top 10 stocks in Bridgewater Associates’ portfolio as of its Q4 2024 13F filing. We settled on the hedge fund’s ten biggest holdings and examined why they stand out as Ray Dalio’s top stock picks. Finally, we ranked the stocks in ascending order based on the value of Bridgewater Associates equity stakes. Additionally, we have mentioned the hedge fund sentiment around each stock, as of Q4 2024.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10 Best Stocks to Buy, According to Billionaire Ray Dalio
10. Visa Inc. (NYSE:V)
Bridgewater Associates Equity Stakes: $193.42 Million
Number of Hedge Fund Holders: 181
Visa Inc. (NYSE:V) is a payment technology company that offers VisaNet, a transaction processing network that enables authorization, clearing, and settlement of payment transactions. It also offers credit, debit, and prepaid card products. While the stock was up by 17% in 2024, it’s already up by about 6% year to date, outperforming the S&P 500, which is down by about 3%.
Visa Inc. (NYSE:V), considered one of the top stocks by billionaire Ray Dalio, is a global leader in payment processing, with 4.7 billion cards accepted at 150 million merchant locations. It generates consistent revenue by charging 1.5% to 3.5% in transaction fees and has shown resilience during economic challenges. Since 2014, Visa’s revenue has grown at an 11% annual rate, with 16% annual earnings growth, highlighting its strong long-term prospects even during crises like the COVID-19 pandemic and global inflation.
Visa Inc. (NYSE:V) delivered solid fiscal first quarter 2025 results as it benefited from healthy spending during the holiday season and improved trends in payment volume. Revenue rose 10% to $9.5 billion, as net income rose 11% to $5.5 billion.
9. PayPal Holdings Inc. (NASDAQ:PYPL)
Bridgewater Associates Equity Stakes: $201.29 Million
Number of Hedge Fund Holders: 94
PayPal Holdings Inc. (NASDAQ:PYPL) is a financial services company that operates a technology platform that enables digital payments for merchants and consumers worldwide. While the company has struggled amid stiff competition from rival businesses, new management under new CEO Alex Chris has sought to reinvigorate its growth metrics.
The restructuring drive has also targeted the product line, resulting in several new features designed to streamline and speed up the buying process, such as Fastlane. It has also implemented operational changes, including integrating the all-important pricing feature. The changes are already bearing fruits, given that the total payment volume increased by 7% year-over-year in Q4 2024. In 2024, PayPal Holdings Inc. (NASDAQ:PYPL) made $31.8 billion in net sales, a 7% increase from the previous year. This led to $4.2 billion in net income, a 2% decrease.
Monthly active users rose 2% to 223 million, while active accounts climbed 2% year over year to 434 million, affirming underlying growth. This is a change from numbers that had begun to fall, and it may be due to PayPal Holdings Inc.’s (NASDAQ:PYPL) new and enhanced features and products. A 5% year-over-year gain in Q4 earnings per share (EPS) reflects management’s efforts to improve efficiency.
