Bridgewater Associates is wary of 2019, as the world’s largest hedge fund told its clients it is “bearish on almost all financial assets.”
Predicting that fiscal stimulus will ebb and the Federal Reserve will continue hiking short-term interest rates, the firm wrote that next year is “setting up to be a dangerous year.” Bridgewater warned investors that the danger “is already here” as the economy traverses treacherous terrain.
The $150 billion fund has been somewhat of a doomsday prophet as of late. In another client note last month, Bridgewater pointed out that higher lending is supporting economic growth and cautioned that the economy was at “about 10 o’clock on the dial.” Once that dial hits 12, the firm predicts there will be a downturn.
“This favors commodities and other real assets in relation to stocks,” Bridgewater said, declaring that investors will shift to bonds and “hurt most everything else.”