Below are Ray Dalio’s Top 5 Stock Picks for 2021. To read our detailed analysis of Ray Dalio’s investment philosophy and his hedge fund’s returns, go to Ray Dalio’s Top 10 Stock Picks for 2021.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s take a look at billionaire Ray Dalio’s top 5 stock picks:
5. The Procter & Gamble Company (NYSE: PG)
Ray Dalio’s hedge fund strong believes in the future fundamentals of The Procter & Gamble Company (NYSE: PG) despite its share price underperformance in the last twelve months. The firm took the share price underperformance as a buying opportunity. Bridgewater Associates has increased its position by 119% in Procter & Gamble Company during the fourth quarter to 3.25% of the overall portfolio, making it the fifth-largest stock holding of the 13F portfolio.
Distillate Capital, an investment management firm, highlighted the confidence in PG’s cash generation potential in the second quarter investor letter. Here is what Distillate Capital stated:
“P&G is an example of a stock where the free cash yield has actually improved over the course of the year on both next-twelve-month estimates and our normalized methodology.”
4. Walmart Inc. (NYSE: WMT)
Walmart Inc. (NYSE: WMT) is among Ray Dalio’s top 10 stock picks for 2021 and it is one of the most favorite stocks of the billionaire hedge fund manager. This is because Bridgewater Associates has increased its position in Walmart by 120% during the fourth quarter to 3.84% of the overall portfolio.
Shares of Walmart have outperformed the broader market trends in 2020 but underperformed since the beginning of 2021 due to easing social distancing policies. In addition to share price gains, Walmart has also been returning hefty cash to shareholders in the form of dividends. The company currently offers a dividend yield of 1.5%.
3. SPDR Gold Trust ETF (NYSEARCA: GLD)
Despite slashing position by 45% in SPDR Gold Trust ETF (GLD) during the fourth quarter, GLD still stands among Ray Dalio’s top 10 stock picks for 2021. After strong gains in 2020, the price of GLD fell sharply since the beginning of this year due to declining gold prices. Managed by World Gold Trust Services, LLC, the GLD fund invests in gold and tracks the performance of the price of gold bullion. Gold prices are under pressure as investors moved their focus towards risky assets including stocks amid prospects for economic recovery.
2. Vanguard FTSE Emerging Markets ETF (NYSEARCA: VWO)
Bridgewater has been holding a position in Vanguard FTSE Emerging Markets ETF (VWO) since 2009 and the firm has raised its stake in the fund by 1 % during the fourth quarter of 2020. It is the second-largest stock holding of the quant hedge fund, accounting for 5.71% of the overall portfolio. The price of Vanguard FTSE Emerging Markets ETF increased 26% in the last twelve months, extending five years gains to 76%. Founded in 1994, the exchange-traded fund invests in public equity markets of the global emerging region. It invests in stocks of companies operating across diversified sectors.
1. SPDR S&P 500 Trust ETF (NYSEARCA: SPY)
Ray Dalio has cut his stake by 7% in SPDR S&P 500 Trust ETF (SPY) during the fourth quarter. Despite that, the exchange-traded fund is the largest holding of Bridgewater Associates, according to the latest 13F filings. The price of SPY rallied 16% in the last twelve months. The firm has been holding a position in SPY since 2007. In addition to price gains, Bridgewater has also enjoyed big dividends from the exchange-traded fund over the years.
Please also see George Soros’ Top 10 Stock Picks and Billionaire Lee Cooperman’s Top 10 Stock Picks.
