Ray Dalio Said "Cash Is Trash" at Davos. Six Weeks Later, Cash Was the Only Thing That Didn't Crash.

At the World Economic Forum in Davos, the founder of the world's largest hedge fund advised investors to dump their cash holdings because "everybody wants in" on the market. He warned that sitting on the sidelines would make investors "feel pretty stupid." Six weeks later, COVID-19 triggered the fastest 30% market decline in history. The S&P 500 plunged 34% from its February 19 peak to its March 23 bottom. Cash — the "trash" Dalio told everyone to avoid — was the only asset that didn't lose value. Those who followed his advice and went "all in" watched their portfolios crater while the "stupid" cash-holders had dry powder to buy the dip at generational lows. To his credit, Dalio eventually reversed himself in October 2022, finally admitting "cash is no longer trash." It only took him 2.5 years.