Dalio: Gold & Non-US Stocks Outperformed US Markets in 2025

Ray Dalio positions his analysis in direct contrast to the prevailing market focus on US technology and AI stocks. He states that while “most people see US stocks and particularly US AI stocks to be the best investments,” the indisputable returns tell a different story. The core of his argument is that “the biggest returns (and hence the biggest story) came from: What happened to the value of money.” Dalio identifies fiscal and monetary stimulus, productivity gains, and significant shifts in global asset allocation away from US markets as the principal drivers behind this trend. This rebalancing, he suggests, has led to a fundamental re-pricing of assets when measured against a weakening unit of account.

The performance data Dalio cites is stark. He highlights that “the best major investment of the year was long gold (returning 65% in dollar terms), which outperformed the S&P index (which returned 18% in dollars) by 47%.” To frame this currency effect more powerfully, he notes that “the S&P fell by 28% in gold-money terms.” This perspective challenges investors to look beyond nominal dollar returns. Dalio warns that “when one’s own currency goes down, it makes it look like the things measured in it went up,” creating an optical illusion of strength for US-denominated assets that masks their relative decline.

The narrative extends beyond precious metals to global equity markets. Dalio points out that “non-US stocks outperformed US stocks by double percentage points last year as a large volume of wealth exited the American markets.” He elaborates that while US stocks appeared strong in nominal dollar terms, “they were much less strong in the currencies that were strong, and they significantly underperformed other countries’ equities.” This led to a clear preference among global investors, who “would have much rather been in non-US stocks than in US stocks, just as they would have preferred to be in non-US bonds than in US bonds and US cash.”

Dalio provides specific regional performance figures to quantify this shift. “European stocks outperformed US stocks by 23%, Chinese stocks outperformed by 21%, UK stocks outperformed by 19%, and Japanese stocks outperformed by 10%.” This broad-based outperformance across major economic regions indicates a systemic, rather than isolated, movement of capital. He interprets this data as evidence of “big shifts in flows, values, and, in turn, wealth away from the US.” This capital flight represents a meaningful diversification of global portfolios, reducing concentrated exposure to US financial assets.

For Dalio, these are not isolated data points from a single year but signals of a deeper, structural transition. The confluence of currency weakness, relative asset performance, and shifting capital allocations points toward a sustained recalibration of the global financial landscape. He concludes that “what is happening will probably lead to more rebalancing and diversifying.” This suggests that the trends observed in 2025—strong gold, strong non-US equities, and a weaker dollar—may not be transient but could define investment outcomes for years to come.

The analysis from the Bridgewater Associates founder serves as a critical reminder to assess investment returns through multiple lenses, especially that of real purchasing power. By focusing on the devaluation of fiat currency, particularly the US dollar, Dalio shifts the discussion from mere asset price appreciation to the preservation of wealth. His data-driven case for gold’s supremacy and the strength of foreign equity markets challenges the entrenched narrative of US market exceptionalism, urging investors to recognize a world where geographic and asset class diversification is becoming increasingly paramount.