Stocks will ‘crack hard enough’, and here’s what billionaire says investors should do to prepare


“In 18 months, things will crack pretty hard. I think you want to avoid this for now. When the next big crisis hits, I think the United States will be the worst performing market, actually, and that will have a lot to do with the weakening dollar.

It was DoubleLine Capital billionaire Jeffrey Gundlach who was hailed as “The Bond King,” sharing his bearish thoughts on the stock market in a recent interview with Real Vision.

“I actually think that owning 25% gold gold,
+ 2,86%
is not crazy right now. I don’t think I own 25% DXY cash either,
+ 0,05%
it’s crazy, ”he said, noting that the two risk averse positions represent half of the concept of a“ permanent portfolio ”, alongside 25% in stocks and 25% in bonds.

“It’s a good investment right now,” Gundlach said. “I think we have such potential risk of results, potential results so scattered, that you really have to have this concept of asset allocation panting. Lis learn more about the permanent portfolio.He then painted a grim picture of the economy, even as many Wall Street professionals call for a V-shaped recovery in the United States. “I don’t think people fully understand the number of business closings in the next few months,” he said, adding he was shocked at the number of empty storefronts that were popping up. “There will be a lot more. I think it will really accelerate. I think there are going to be real problems in the winter here.

Gundlach told Real Vision that the next “very rare” opportunity to slaughter stocks is looming in a few years. The trick is to be prepared when the good deals are there to take.

“Trade is to wait for this trade,” he said. “It will be a pleasant enough experience not to be in the car on the first roller coaster to come. I just want to be very low risk for now. ”

Waiting for this trade seemed like a very good idea on Sunday night, as futures contracts for the Dow Jones Industrial Average YM00,
S&P 500 ES00,
+ 0,06%
and the high-tech Nasdaq-100 NQ00,
+ 0,35%
all pointed out a weak opening to start the week.


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