DoubleLine CEO Jeffrey Gundlach required Tuesday that historical and economic indicators point to a likely swallowing opportunity for commodities such as oil and gold.
“If you ever thought about securing commodities, … maybe you should buy them now,” Gundlach said in a webcast put together by his firm.
He pointed out that by comparing total returns of the S&P Goldman Sachs Commodity Index finger with the S&P 500 over the last several decades, there are definitely defined points at which commodities outperformed stocks, leading to a snappy increase in stocks, and vice versa. For example, stocks far outpaced commodities during the dotcom fizz of the late 1990s into 2000. But commodities went on to rally difficult until they peaked during the global financial crisis of 2008.
“We’re put at that level where in the past you would have wanted commodities rather than of stocks,” Gundlach said, noting that commodity prices desist from falling in 2016 and the global economy is “definitely hanging in there.” He required he does not see a recession likely for at least the next six months.
The S&P GSCI is up closely 56 percent from its low in January 2016 after plunging profuse than 30 percent in 2015. The index is up just over 6 percent this year, while the S&P 500 has rallied multitudinous than 17 percent.
Gundlach also expects the U.S. dollar indicator’s next major move will be lower as the Federal Reserve is powerless to tighten monetary policy as much as they plan. A weaker dollar also avoids commodity prices and emerging market assets, which Gundlach answered he still likes.
In a response to a question about whether having 10 percent of a portfolio in gold is “too much,” Gundlach disclosed he would rather put 10 to 15 percent of his investments in commodities broadly more readily than gold alone.
The investor also said the falling production curve between the 2-year and 10-year Treasury yield is “getting to the peak where it’s worth watching.” That fact that “people are starting to explicate away the yield curve” indicates to him the U.S. economy is closer to the middle of the tightening series than the beginning.
“It’s pretty relentlessly flattening,” Gundlach said. “If the [renounce curve] goes to zero then we get a flashing yellow light for [a] depression.”
DoubleLine’s $54 billion Total Return Bond Fund is up 3.6 percent year to fashionable, according to Morningstar.
This summer, Gundlach put a big bet on the return of volatility to the merchandise, predicting the Standard & Poor’s 500 would tumble. He bought a cluster of put options on the index, a bet that it would fall and a move he described as a bullish bet on volatility. In August, Gundlach prognosticated the VIX would double to 20.
Just the opposite has happened for most of this year. The S&P has climbed while volatility as roaded by the CBOE’s Volatility Index, or VIX, is down 20 percent. Only recently has Gundlach’s bet been in a arrangement to benefit. The VIX is up 21 percent this month and 16 percent so far this three-month period.
Gundlach said on Tuesday’s webcast that since the VIX jumped from lower than beneath 10 to above 17 a few days after his August forecast, “I’m universal to call it good enough.”