Exclusive | Ray Dalio’s stock tip: diversify portfolios to avoid getting caught in US-China rivalry

The two great powers are “on the brink of a much worse economic or military war” but neither wants to cross that line, as a major deterioration from current conditions could be disastrous, Dalio said in exclusive comments made to the Post. This strained but contained rivalry is set to pose major risks for global investors, he added.

“I expect that there will continue to be a vicious competition,” he said in an emailed response to the Post. “As a result they will both press up against the other’s red lines, and they both have their own big domestic challenging circumstances that could cause instability.”

The domestic situations within each country, especially how the internal conflict in the US pans out over the next year, will have a greater impact on US-Chinese relations and what the new world order looks like than anything else, he added.

“Both countries and the world are in risky positions” amid the elevated debt burden, technology and climate changes, he said. “That makes diversification of investments in different asset classes and different countries more important than ever.”