Ray Dalio, founder of Bridgewater Associates, has warned that U.S. markets face mounting risks as federal spending on debt servicing rises. Speaking ahead of Abu Dhabi Finance Week, Dalio likened the situation to the human circulatory system: debt accumulation squeezes out other forms of expenditure, building up like plaque in arteries.

“A doctor would warn of a heart attack,” he said, underscoring the urgency of the risk.

Dalio recommended that investors include gold in their portfolios as partial protection against systemic stress. “A well-diversified portfolio should have somewhere between 10% and 15% in gold,” he advised. He emphasized that gold’s value tends to rise particularly in crisis scenarios—when most other asset classes lose value.

With global debt levels swelling and geopolitical tensions escalating, Dalio suggested that investors also ask themselves, “whose money do you own?” when structuring what he called a neutral portfolio.

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On the same panel, Standard Chartered CEO Bill Winters noted that while valuations in Europe are not as lofty as those in the U.S., the underlying conditions are comparable. “The UK and France are in similar situations, but markets have been providing more severe constraints than the U.S.,” he said.Dalio’s remarks come against the backdrop of strong performance in U.S. equity markets this year—both the S&P 500 and Nasdaq have gained more than 11% and 13%, respectively. Recent inflation numbers, cooler than expected, have also boosted hopes that the U.S. The Federal Reserve may begin lowering interest rates soon.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)