What ordinary investors can learn from Bridgewater's outstanding 2018 performance

Bridgewater's pure Alpha strategy fund, benefiting from which billionaire founder Ray Dalio as described as a "Goldilocks period" for the stock market, shattered competition last year with a gain of 14.6%.

It is a period where S & P 500

SPX, + 0.13%

lost 4.4% and the average hedge fund lost 6.7%.

Dalio did not get into the details of his achievement, but he shared this "one important thought" in a LinkedIn post on Monday:

& # 39; If you are worried when the stock market goes down and happy when it goes up, it probably indicates that your portfolio is unbalanced. If your income is also related to how the economy does, you are twice in danger because your portfolio may go down when your income is worst, which is scary. & # 39;

He explained that most people and businesses are in that position and often pose the risk of borrowing more money, which only aggravates the problem.

"That's what makes the economic runway up and down so big and dramatic," said Dalio. "For me, the key is to have no systematic disturbance by structuring your portfolios and your earnings so that they nest and balance each other. Achieving good balance is the most important thing."

Westport, Conn. -Based Bridgewater – with $ 160 billion in assets – ranks as the world's largest security fund. The Pure Alpha Fund has been a steady outperform, which on average has returned two digits over its 28-year history.