Key Point
- DoubleLine CEO Jeffrey Gundlach warned Tuesday that the stock is trading at levels similar to the start of the last bear market.
- The historic stock bull market peaked about two years ago, with the S&P 500 hitting an all-time high on January 3, 2022.
DoubleLine CEO Jeffrey Gundlach warned Tuesday that stocks are trading at levels similar to the start of the last bear market, and investors are holding a significant portion of their portfolios in cash. He said it was wise. “The stock market based on traditional metrics (P/E, book value, everything else) is as overvalued as it was two years ago, but bond yields are about 500 basis points higher on short-term rates and about 400 basis points higher. “In other parts of the curve, there are completely different valuation metrics,” Gundlach said at the exchange-traded fund conference. The previous stock bull market peaked about two years ago, with the S&P 500 index hitting an all-time high on January 3, 2022. The index then fell by about 25% to its bottom in October of the same year, before rising in 2023. Last month, it hit a new record high. .SPX 5Y Mountain S&P 500’s previous bull market rally culminated in his early 2022. That wariness of stocks is reflected in Gundlach’s approach to a balanced portfolio. As opposed to a traditional 60/40 split between stocks and bonds, Gundlach says he prefers a 45% ratio in bonds and 25% in cash, “because you want to be able to buy when the prices are low.” Told. When it comes to stocks, he cited Japan and India as overseas markets he is optimistic about. Gundlach also said he would allocate about 10% to real assets such as gold. Mr. Gundlach has repeatedly warned that the U.S. economy is unlikely to have a soft landing or a “Goldilocks” outcome. He also said Tuesday that interest rates could rise during the next recession, rather than fall as they did during the recent recession. Despite the generally cautious outlook, Gundlach said there are areas in commercial real estate and high-yield bonds that offer attractive yields and are fairly safe for investors. DoubleLine manages approximately $100 billion in assets and has recently launched six of his ETFs, including a commercial real estate focused fund (DCRE) and an equally weighted Fortune 500 fund (DFVE). Ta. Don’t miss CNBC PRO: 3 stocks that could replace Tesla in ‘Magnificent 7’ Morgan Stanley raises Nvidia price target ahead of earnings: ‘AI demand continues to surge ” Vanguard launches two new ETFs to hit this sweet spot
