Ray Dalio just raised a red flag for Americans who ‘care’ about their money — Here’s why Canadians should limit their exposure to U.S. investments

Ray Dalio, founder of the world’s largest hedge fund, Bridgewater Associates, has a stark warning for investors in the American market.

The U.S. may be heading towards a “debt-induced heart attack” due to years spent servicing an ever-increasing national debt, Dalio wrote in an X post in early September.

And this isn’t the first time Dalio has raised a red flag.

“For those who care about the value of their money, the risks for U.S. government debt are greater than the rating agencies are conveying,” he wrote in another post on X in May this year.

As of Sept. 12, the U.S. gross national debt stands at US$37.45 trillion — the highest in the world.

And with President Donald Trump’s One Big Beautiful Bill Act — which is estimated to add another US$3.4 trillion in federal deficits over the next decade, based on a July 2025 Congressional Budget Office estimate — Dalio anticipates the “heart attack” could occur within the next three to five years.

This is hardly surprising, given that the U.S. economy has been thrown into turmoil by Trump’s policies, according to some experts.

Though the legality of Trump’s tariff policies is currently contested in U.S. courts, the outlook seems grim on both fronts.

So what should Canadian investors do to ensure their portfolios aren’t overly exposed to the volatility and risk of U.S. investments? And what about international markets?

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Diversification outside the NYSE

The U.S. Dollar Index fell 10.8% in the first half of 2025 — marking its worst performance since 1973 when Richard Nixon was president.

Meanwhile, inflation has steadily chipped away at the dollar’s purchasing power. According to the Federal Reserve Bank of Minneapolis inflation calculator, US$100 in 2025 buys what just US$12.56 could in 1971 — the year the U.S. moved off the gold standard.

While many Canadian investors stick close to home when it comes to stock market investments, it may be time to consider international exchanges.

While overseas markets aren’t immune to the overall uncertainty, their valuations aren’t as high, according to Bill Winters, CEO of Standard Chartered.

"The UK and France are in similar situations but markets have been providing more severe constraints than the U.S.," Winters said at a launch event in September for Abu Dhabi Finance Week.

In the Canadian market, sectors like technology or health care are underrepresented on the TSX, but these can prove to be valuable investments and good choices for diversification. For Canadian investors who hold U.S. stocks, hedged ETFs and mutual funds that use financial instruments to reduce currency fluctuations are a good choice if you want to maintain some exposure to American stocks, per the TSI network.

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Invest in a “very effective diversifier”

Gold performance has been steadily increasing since Trump took office, and is up over 19% in the last six months. Its performance is due to the uncertainty in the stock market, as the metal is widely regarded as the ultimate safe haven during economic turmoil or geopolitical uncertainty.

Dalio himself has repeatedly emphasized gold’s importance in a resilient portfolio.

"A well-diversified portfolio would have somewhere between 10% and 15% in the portfolio of gold," said Dalio, during the same launch event Winters spoke at.

Buying gold, whether bullion or shares in the commodity, can help investors to weather the ups and downs of the market — both for U.S. and Canadian investments.

“When bad times come, gold is a very effective diversifier,” Dalio told CNBC earlier this year.

You can buy gold e-certificates with CIBC Investor’s Edge — allowing you to invest in precious metals without having to worry about storing and protecting physical gold bars.

Plus, you can get expert insights from industry titans on when to buy, hold and sell stocks and other securities, which can be instrumental in growing your net worth.

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— with files from Aditi Ganguly

Sources

1. American Enterprise Institute: A US Economic Crisis Foretold by Desmond Lachman (June 10, 2025)

2. National Bank: Investing internationally to diversify your portfolio by Vanguard Investments Canada Inc. (April 19, 2024)

3. TSI Network: Currency Considerations for Canadian Investors in U.S. Stocks: A Comprehensive Guide by Pat McKeough (June 25,2025)