Dalio said investors should ride the market melt-up but dump cash for a diversified portfolio as central bankers undergo unprecedented money printing.

"Cash is trash," Dalio said. "Get out of cash. There's still a lot of money in cash."

This is not the first time Dalio used Davos as a platform to accuse cash of being a terrible asset: back in 2018, he said that "if you're holding cash, you're going to feel pretty stupid." On Dec 31 of that year, cash would end up being the best-performing asset of the year. So perhaps just to hedge his call, this time Dalio also suggested diversifying into gold:

"You have to have balance ... and I think you have to have a certain amount of gold in your portfolio," Dalio said, adding that gold will be a top asset to own in the years ahead as central banks will fail to normalize in the next downturn, which could've already started.