Dalio US Elections: Why Investors Should Diversify Now

Billionaire investor Ray Dalio has issued a new warning about the future of the US economy. His year end review for 2025 summarizes the political mess, the debt structure and the weakness of currencies. All of this could be a problem following the 2026 midterm election, he stated. 

Dalio, the founder of Bridgewater Associates, has a record of studying economic cycles for multiple years. Thus considering his experience in analysing debt cycles in the past, this news might be worth looking out for.

Political Risk Over US Economic Policy

Dalio also highlighted the risk of a potential power shift in Congress. Further stating that if the Republican Party loses control of both the Senate and the House, current policies could be reversed. 

According to Dalio, policy swings that happen often can make long term planning weaker. It can also make it harder for investors to trust the stability of the system. He warned that political polarization is increasing, and the chances of sudden change in taxes and regulations could be higher. 

He argued that uncertainty like this is what makes most investors look for options outside of the U.S. While looking out for markets where their capital investments are more valued and the markets are more predictable.

Dalio Sees No Quick Recovery for the US Dollar

Ray Dalio’s most stressed point was about the ongoing structural decline of the US dollar. He argued that the dollar’s decline was not just from interest rates cycles and is not temporary. 

Instead, his theory is that the dollar’s weakness is because of structural trends. Such as the high debt levels, budget deficits and the constant money creation. These pressures, Dalio stated, eventually reduces the currency’s purchasing power. As a result, Dalio believes that dollar based assets will give less real returns, especially after inflation.

Gold and Other Assets Gain Interest

Dalio pointed to gold, the Chinese renminbi and other non-dollar assets as the ones that benefit more. He also noted that gold in particular plays a key part in being the safest against any political instability. 

While he did not support abandoning the dollar entirely, he did stress on diversification. Dalio said that the inventors who rely a lot on dollar based assets could see lesser returns in the coming years. 

Dalio Urges Strategic Investor Thinking

Ray Dalio concluded his outlook by asking investors to think beyond the short election cycles. He also said that ignoring these structural imbalances now can negatively impact a lot in the future. 

Therefore, as the 2026 elections draw closer, Dalio’s warning is that the political outcomes could play a pretty big role for the upcoming financial system.