(Bloomberg) -- Ray Dalio says the impact of the coronavirus outbreak on markets has been exaggerated and is likely to be short lived.
Investor concerns over the pandemic “probably had a bit of an exaggerated effect on the pricing of assets because of the temporary nature of that, so I would expect more of a rebound,” Dalio, the billionaire founder of Bridgewater Associates, said at a conference in Abu Dhabi on Tuesday. “It most likely will be something that in another year or two will be well beyond what everyone will be talking about.”
Dalio leads the world’s biggest hedge fund, which manages $160 billion in assets. Bridgewater has made $58.5 billion for its clients since its beginning in 1975, the most by any hedge fund, according to estimates by LCH Investments, although last year its main fund suffered its first loss since 2000.
Global equities have been in turmoil amid fears about the spread of the deadly coronavirus. The death toll from the outbreak has climbed above 1,000, with cases still being confirmed globally and steps being take to contain it continuing apace. Flights are still being canceled, economic warnings remain bleak and companies are pulling out of events for employee safety.
Outbreak Stabilizing
Yet, stock markets are still hovering around record levels and a risk-on feel pervaded Asian stocks, which rose on Tuesday as investors try to decipher whether the outbreak is stabilizing.
Dalio said investors should instead focus on issues such as wealth and political gaps, the emergence of China -- and what that means for the competitive landscape -- technology and the environment.
“Each one will interact,” he said. “What concerns me most if you did have a downturn -- we are now 11 years in expansion -- whether that’s one, two, three years forward, with the larger polarity that exists, the wealth gap and the political gap. I would be more concerned about that.”
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