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Stocks “will crash pretty hard” and here’s what a billionaire says investors should do to prepare



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‘Within 18 months, it will break pretty hard. I think you want to avoid it for now. When the next big crash occurs, I think the US will be the worst performing market, actually, and that will have a lot to do with the weakening dollar. ”

This is 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 I own 25% gold
GOLD,
+ 2.86%

he’s not crazy now. Nor do I think I own 25% in cash
DXY,
+ 0.04%

it’s crazy, “he said, noting that the two risk-averse positions make up half of the” permanent portfolio “concept, along with 25% in equities and 25% in bonds.

“This is a good investment right now,” Gundlach said. “I think we have such potential results tail risk, such scattered potential results, that it’s really necessary to have this edgy asset allocation concept.” To read more about the permanent portfolio.

He continued to paint a bleak picture for the economy, even as many Wall Street professionals are calling for a V-shaped recovery in the US “I don’t think people fully understand how many business closures there will be in the coming months,” he said. , adding that he is shocked at how many empty windows are popping up. “There will be a lot more. I think it will really accelerate. I think there will be real problems here in the winter.”

Gundlach told Real Vision that the next “very rare” opportunity to make a killing in stocks will come within a couple of years. The trick is to be ready when business is there to be taken.

“The job is to wait for the exchange,” he said. “It will be quite a pleasant experience not to be in the car on the first wheel of the roller coaster that is coming. I just want to have a very low risk right now.”

Waiting for such a trade seemed to be a good idea on Sunday evening, as futures for the Dow Jones Industrial Average
YM00,
-0.01%
,
S&P 500
ES00,
+ 0.07%

and the technological Nasdaq-100
NQ00,
+ 0.36%

everything indicated a weak opening to start the week.


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