Billionaire investor Ray Dalio has renewed his belief that cash is an attractive investment, saying it becomes more attractive than stocks and bonds amid rising interest rates. “Cash used to be trash. Cash is pretty hot now,” Dalio said on CNBC’s “Squawk Box” on Thursday. “It’s attractive for bonds. It’s really attractive for stocks.” The founder of Bridgewater, one of the world’s largest hedge funds, says we’re now in our 12 and a half cycles since 1945, when real interest rates spiked following aggressive Fed rate hikes. Federal Reserve. “Real interest rates have gone from minus 175 basis points to 175 basis points, haven’t they? You have a relatively high cash ratio,” Dalio said. “You have the classic movement when rates go up and money is tied.” Dalio called it “trash” because the purchasing power of cash diminished amid rising inflation, but he changed his mind in October when higher interest rates led to it finally yielding some profit. The much-followed investor says higher interest rates are particularly affecting growth-oriented stocks that need to borrow to expand. Last year, the tech-heavy Nasdaq Composite fell 33.1 percent, worse than the S&P 500’s 19.4 percent drop. Both experienced their worst year since 2008 and posted three-year winning streaks. “You lose the parts of the economy, the parts of the market that are the parts of the bubble that need cash flow,” Dalio said. So you’re seeing that not just reflected in the long-term stocks.” On the topic of recession, the billionaire founder said that if the US falls into a recession, it won’t be so dangerous. “This kind of recession isn’t a bad one, it’s a lot less bad than I thought it would be because of the fact how it’s distributing and shrinking that credit,” Dalio said. Last year, Dalio stepped down as one of Bridgewater’s three co-investors and transferred all of his voting rights to the board.