Last week, Ray Dalio, founder of Bridgewater, the world's largest hedge fund Dalio posted on social media that it would continue to invest in China, and now is a good time to buy Chinese stocks. While China faces some challenges, just as other countries such as the United States and Europe have their own problems, "none of them will be enough to offset its investment attractiveness."

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Dalio has made clear his quest for a deep understanding of the world, and China, as an important pillar of the global economy, is indispensable in this process. He admits that it is almost unthinkable to ignore China if we want to achieve true portfolio globalization and diversification. For example, the U.S. and China have unparalleled influence in many of the world's key industries, and the dynamics of the relationship between the two countries will largely shape the future of the world.

In his view, the key point of the current investment strategy is no longer simply "whether you should set foot in the Chinese market", but more specifically "how much money should be invested in China". In Dalio's investment philosophy, the ideal allocation is to find 15 investment areas with good return potential and low correlation with each other. Due to its unique position and investment value, China has been included in these 15 key investment options and is destined to become a core component of his portfolio.

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Dalio's investment philosophy includes a deep understanding of markets around the world, and he believes that economies such as China, the United States and Europe all face unique and complex problems. He does not shy away from any potential risks in the market, but rather has an in-depth consideration of these challenges that helps him stay alert and agile in his investment decisions.

Dalio has a pragmatic view of China's economy, arguing that despite the current pressures, these challenges are manageable and that China is actively pursuing a path to orderly deleveraging. He noted that the Chinese government and market participants are committed to promoting a so-called "nifty deleveraging" that aims to maintain economic growth and social stability while reducing debt levels.

In addition, based on his extensive experience of investing around the world, Dalio reiterates the core principle of an investment strategy: "When market panic is pervasive and asset prices fall to low levels, there are often great investment opportunities." In particular, he mentioned that at a time when market sentiment is extremely pessimistic and valuations are undervalued, if accompanied by an effective process of "beautiful deleveraging", then this may be the best time to buy the dip.

Investment diversification is crucial

Dalio emphasized that the Chinese market is crucial for a comprehensive understanding of the global economic landscape and for building an effective investment diversification strategy. In his view, there is no absolute good or bad in the market, the key is whether the investment decision is correct or not. The Chinese market is in line with its rigorous investment logic and strategic needs.

Without investment in the Chinese market, Dalio believes it will be difficult to achieve the desired diversification. For example, given that China and the United States are two of the world's most important industries, their interaction will have a profound impact on the global order. Therefore, without including China in the scope of investment, risk diversification and diversification of income sources cannot be fully achieved.

At the same time, Dalio has pointed out in his previous discussion that the problems that China is currently facing are to some extent manageable. This is based on two main reasons: first, his investment methodology does not rely on capturing alpha in a particular market environment, whether bull or bear, but rather on long-term robustness, and second, he believes that Chinese policymakers have the ability and wisdom to navigate the problems of the financial system, as other countries throughout history, to adapt the financial system to economic changes, and to respond to the challenges posed by politics, geopolitics, natural disasters, and technological change.