In the past, Ray Dalio, a billionaire investor, has adviced to minimize cash exposure due to rampant currency debasement. Used to say that "cash is trash", Dalio received a lot of attention due to this phrase. Recently, at the Greenwich Economic Forum, Dalio changed his view, considering that cash is now a "relatively attractive asset class". He stated that cash is relatively attractive at this moment, mainly because it has a 1.5% real return and does not have price risk. He also commented that it’s important to judge investments in terms of inflation-adjusted dollars, rather than nominal terms, as cash in 2021 will lose 4%or 5% to inflation.

The "cash is trash" narrative has been completely reversed by Dalio in today's markets. Inflation combined with low-interest rates is creating an environment where cash is no longer the worst investment option, although its returns are still not considered great. Investors need to explore different options to make sure they are making the right decisions and maximizing the benefits in a given market. It is important to carefully understand each asset class to make the right decisions and have an optimized portfolio.



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