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Ray Dalio says cash is the worst long-term asset as inflation erodes value
Dalio argues that even cash in money market funds or other short-term interest-bearing vehicles can lose purchasing power when inflation runs around 3.5% to 4%.
Ray Dalio, the Bridgewater Associates founder, said cash including savings balances and short-term, interest-bearing vehicles can deliver the worst long-term returns because inflation erodes purchasing power. In an appearance on The Diary of a CEO podcast, he said people often view cash as safe, but that sense of safety can be misleading.
Dalio’s comments were not limited to physical money in a drawer. He said his view of cash includes money held in forms such as money market funds and other short-term accounts that provide an interest rate.
While earning interest is better than keeping cash idle, Dalio argued it is often not enough to offset inflation over time. He estimated inflation at roughly 3.5% to 4%, and cited U.S. Consumer Price Index data showing CPI rose 3.5% between June 2025 and June 2026, according to the U.S. Bureau of Labor Statistics, in the context of his purchasing-power argument.