Latest Ray Dalio Trades Reveal Market Strategy

Coming up with original ideas is one of the foundations for success as an independent trader or investor in the financial markets, though sometimes ideas can run out during quiet markets. Today’s S&P 500 volatility spike after the latest round of tariffs implemented by President Trump brought investors to the opposite end of the spectrum, where markets become so fast-moving that there is not enough time to process and research most ideas properly.

Access to the latest buys and sells by some of Wall Street’s most respected names can give investors an advantage during a fast market, as they can save several hours worth of research and work to come up with an idea from scratch. Far from copying a big investor’s position, seeing what professionals are doing can lead retail investors to reverse engineer some of these decisions to act for themselves.

Today’s signal comes from Ray Dalio, who runs the world’s largest hedge fund, Bridgewater Associates. Whatever he sees for the market down the line could significantly impact his decision-making.

In a nutshell, Dalio decided to leave the United States market in exchange for Chinese stocks like Alibaba Group NYSE: BABA while leaving behind names like Alphabet Inc. NASDAQ: GOOGL and others in the technology sector.

What Dalio Moved Specifically

Over the first quarter of 2025, Ray Dalio has decided to sell his stakes in the United States market in ways that most of the market did not expect. By getting rid of Alphabet, Dalio raised eyebrows at first, but the selling did not end there.

Apart from Alphabet, Dalio also chose to leave Meta Platforms Inc. NASDAQ: META and NVIDIA Co. NASDAQ: NVDA, which might give investors a deeper insight into his view of the technology space overall. While these names are generally considered to be stable and good companies overall, there’s some trouble brewing underneath.

Not trouble in terms of company-specific issues, but rather when looking at the market in a global macro perspective (something Dalio is known for doing). Compared to Chinese technology companies, these American names look too expensive for this fund manager to justify holding today, especially when the S&P 500 is under so much volatility.

Speaking of the S&P 500, Dalio’s firm also sold all of its holdings in the SPDR S&P 500 ETF Trust NYSEARCA: SPY to go along with the technology sector selling.

Now, when investors link this view to the potential for a 20% decline in the index, a call made by a Goldman Sachs analyst, the picture becomes clearer.

The United States stock market, while being the strongest and one of the best-performing, is just too expensive compared to future growth expectations, calling for a normalization in valuation multiples from here. On the other hand, Dalio didn’t keep this newly liquidated capital on standby; he chose to go with value elsewhere.

Why China as His Pick?

Looking at the spectrum from a valuation perspective, companies like Alibaba make much more sense than their American counterparts, but this one wasn’t the only Chinese blue chip company Dalio decided to buy this quarter. Baidu Inc. NASDAQ: BIDU was also at the top of this list to buy this time around in China.

However, investors need to remember that Dalio is a global macro investor, so here are other macro perspectives to consider for this Asian market and how it fares against the United States stock market.

As always, the “Buffett indicator” might be a great start from a valuation perspective.

This indicator is a ratio of the stock market’s value relative to a country’s GDP.

For the United States, this ratio is near an all-time high of 200%, just recently coming down to 185%, which is still above the long-term average. China’s ratio looks more like 64.5%, making it less than half as expensive as the United States.

In terms of President Trump’s tariffs (which are mostly targeted at China), Dalio might see today’s market uncertainty as something that will eventually subside. When taking this valuation divergence intosk-to-reward ratio is much account, the ri more favorable for China than the United States, confirming why his view might be more focused there.

Zooming in, looking at the relative price action between the two most popular names in this list (Alibaba and NVIDIA), this divergence becomes even clearer.

While NVIDIA trades at 88% of its 52-week high, which also happens to be the stock’s all-time high, Alibaba’s price today is only a fraction of what its all-time high was during 2021, just over $315 per share.

The message for investors here is that if they are invested in American technology stocks, they might want to consider current valuations next to future growth prospects and whether they are justified. If all else fails, Dalio’s choices suggest a better deal could be had in Chinese technology moving forward.

Before you consider Alibaba Group, you’ll want to hear this.

MarketBeat keeps track of Wall Street’s top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on… and Alibaba Group wasn’t on the list.

While Alibaba Group currently has a Buy rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here