Ray Dalio: “We did not know how to navigate the virus…So, we stayed in our positions and in retrospect we should have cut all risk” – indexers are in good company

www.ft.com/content/6addc002-6666-11ea-800d-da70cff6e4d3

Hedge fund legend Ray Dalio talks about the losses his fund has taken. They had to decide how to respond to the coronavirus situation, and just sat on their hands. No doubt many more mutual and hedge funds are having to make tough re-allocation decisions right now. I know folks here are mostly buy-and-never-sell index investors, but this is an interesting glimpse into the active investment side of things.

edit: I actually don’t understand why active funds like his didn’t take larger hedging measures against the virus spreading and disrupting economies everywhere. If there’s, say, a 30% chance of a 30-50% fall in equities, it would be remiss for active managers not to hedge against that scenario. While hindsight is 20-20, choosing not to take action was really an active bet that the virus wouldn’t have significant impact, and I don’t see why he or the analyst-managers at his firm made that call.