Wall Street Icon Dalio Warns of Market Correction
Billionaire hedge fund pioneer Ray Dalio, former CEO of Bridgewater Associates, has expressed concerns over the valuations of leading technology stocks such as Nvidia (NVDA) and Amazon (AMZN). In an interview on Yahoo Finance's Opening Bid podcast, Dalio cautioned that the "Magnificent Seven" tech giants have become significantly overvalued.
According to Dalio, if 10-year Treasury yields continue to rise as expected, momentum-driven stocks could experience a sharp correction. He emphasized the importance of diversification and suggested investors reconsider their portfolio allocations.
Despite Dalio's track record of making bold market predictions, some of his earlier forecasts have not materialized fully. However, his concerns about U.S. debt levels, which exceeded $1.8 trillion in fiscal year 2024, resonate with investors.
The article highlights the risks associated with the Trump administration's policies, including a potential trade war with China, the rising U.S. dollar, and the Fed's uncertain monetary policy. It also discusses Dalio's belief that the U.S. economy needs to address its debt situation to mitigate potential negative consequences.