Ray Dalio warns investors to allocate 15% of their portfolio to gold and crypto because of skyrocketing U.S. government debt

Dalio warned that the “economic heart attack” ly to be caused by the rising debt hasn’t been priced into currency and bond

While he didn’t reveal how he allocates his own portfolio, this percentage represented “the best return-to-risk ratio,” he said on The Master Investor Podcast with Wilfred Frost

Dalio noted he owns both gold and crypto, but with a caveat, he owns some Bitcoin but not much. “I’m strongly preferring gold to Bitcoin, but that’s up to you,” he said

The larger issue is the devaluation of money, and gold has vided a hedge against this issue throughout history

Bitcoin, in recent years, has also played a similar role as a store of value, and “it’s being perceived by many as an alternative money,” he added

Still, Dalio said he also doesn’t want investors to overload on gold, instead saying, “I want them to diversify well.” Dalio declined to Fortune through a spokesperson

On stocks, Dalio said the recent hype over AI has made Magnificent Seven stocks Alphabet, Amazon, and Meta relatively expensive, despite the grand mises of the nology. “The Magnificent 7 have become rather expensive relative to what even optimists would say are the present value of the future cash flows,” he said

Dalio has warned previously buying into overvalued stocks even when a company looks great. “A great company that gets expensive is much worse than a bad company that’s really cheap, so you have to look at pricing” he told entrepreneur David Freidberg on the All-In Podcast earlier this year

The state of the U.S. economy and the ballooning federal debt have been favorite topics of Dalio’s for years

He previously compared escalating debt payments to “plaque in the arteries,” and said on the podcast with Frost that the “economic heart attack” which could come because of increasing debt has not been priced into either the bond or currency

Dalio’s warning bonds goes hand-in-hand with his skepticism how the government is handling its debt, said Stephan Shipe, a finance fessor at Wake Forest University and founder of financial advisory firm Scholar Financial Advising. “If there’s a lack of faith in the government’s ability to manage the deficit and repay debt, you’re ly to see interest rates rise to compensate for that higher risk

That pushes down the value of existing bonds, which makes them less of a safe haven than they’ve been in the past,” Shipe said

The trend of escalating interest payments on the federal debt continues; the interest payments could cost the government $13.8 trillion over the next 10 years, according to the Congressional Budget Office

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