Ray Dalio, founder of investment firm Bridgewater Associates, said Tuesday that he thinks investors shouldn't miss out on the strength of the current market and that they should dump cash for a diversified portfolio.

"Everybody is missing out, so everybody wants to get in," Dalio said on CNBC's "Squawk Box" at the World Economic Forum in Davos, Switerzland.

Dalio advised having a global and well-diversified portfolio in this market and said the thing people can't "jump into" is cash.

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

Dalio's firm, Bridgewater, manages about $160 billion. His declaration that investors should not stay on the sidelines is one he's made before, as in 2018 he declared that those holding cash were "going to feel pretty stupid" for missing the market's run-up.

"You have to have balance ... and I think you have to have a certain amount of gold in your portfolio," Dalio said, reiterating his call last year that the precious metal will be a top investment in the years to come.

While he endorsed buying a bit of gold, he warned against more speculative investments like bitcoin.

"There's two purposes of money, a medium of exchange and a store hold of wealth, and bitcoin is not effective in either of those cases now," he said.