Ray Dalio Believes American Politics Will Cause The Next Stock Market Crash

Have you ever wondered how politics impact financial markets? Does the President of the United States matter? The simple fact is this: the Dow Jones Industrial Average climbed 29,225% from 1918 to 2017. Over that same timeframe, there have been 17 Presidents and even more congressmen and senators. The market has rarely cared, over the long-term, about politics. The American machine is strong and alive. But, that does not mean one of the world’s smartest hedge fund managers is asleep.

In 2017 and 2018, Ray Dalio thinks politics will cause the next great market crash. In this post, we’ve highlighted his thoughts that everyone needs to see. As you read them, ask yourself if you agree or disagree with Dalio. You can read the entire post at the link below:

“History has shown that democracies are healthy when the principles that bind people are stronger than those that divide them, when the rule of law governs disputes, and when compromises are made for the good of the whole—and that democracies are threatened when the principles that divide people are more strongly held than those that bind them and when divided people are more inclined to fight than work to resolve their differences. Conflicts have now intensified to the point that fighting to the death is probably more likely than reconciliation.” – Ray Dalio

“The majority of Americans appear to be strongly and intransigently in disagreement about our leadership and the direction of our country. They appear more inclined to fight for what they believe than to try to figure out how to get beyond their disagreements to work productively based on shared principles.” – Ray Dalio

“A) Most realities happen over and over again in slightly different forms, b) good principles are effective ways of dealing with one’s realities, and c) politics will probably play a greater role in affecting markets than we have experienced any time before in our lifetimes but in a manner that is broadly similar to 1937.” – Ray Dalio

“While I see no important economic risks on the horizon, I am concerned about growing internal and external conflict leading to impaired government efficiency (e.g. inabilities to pass legislation and set policies) and other conflicts.” – Ray Dalio

Read Ray Dalio’s entire post here titled, The Principles That Divide Us Might be Greater Than Those That Bind Us Together