To help extend the current bull market into extra innings, Dalio suggests the Fed not increase rates at a rate that exceeds what the market expects. In the meantime, investors should take a more defensive stance with respect to the stock market as the parallels between the current economy and that of 1937 become more apparent.

As far as painting a vision of what the next market downturn looks like, Dalio cited environs rife with political and social unrest.

“We’re nine year into this (bull market),” said Dalio. “As you have a downturn, I believe that there’s a political and social implications to that.”

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