As you can see from Jeffrey Gundlach of Doubleline Funds interview with Yahoo Finance he is not painting a rosy picture of the market.
How does the market look like?
The Yahoo Finance author paints Mr.Gundlach as a “bearish” investor. That is not accurate. I often see this from Wall Street writers/workers. If you are not bullish all the time, you must be a perma-bear. Gundlach has had a lot of investing success and has had a few prescient bullish calls just over the last few years. He is certainly not a perma-bear, he is a realist. The excess government debt and deficits that have gone on for decades can’t continue forever. In addition, it is not gloom and doom that we will have a recession at some point, just reality. We are currently in the longest economic expansion in history. Not the greatest gain, just the longest. These things are cyclical, the party will end.
I also share Mr. Gundlach’s concerns regarding the market not making it back to the current highs for a long-time. As he notes, in his lifetime. I have studied the Japan debacle. Their stock market has still not reached the highs set in 1989! To be clear the US is not Japan. We have a similar aging society but much better outlook regarding ratio of young and old, and stronger immigration, which will be extremely helpful to our economy if managed well.
What’s the upside in all of this?
The silver lining? If Mr. Gundlach and others are right regarding challenging times ahead, there will be GREAT investment opportunities. If stocks retreat and provide strong dividends even if the market doesn’t climb back up for years, those dividends will provide great compounding.
The same goes for bond rates. After bond rates reach their bottom, if they haven’t already, and start climbing we can lock in great bond interest yields when bonds are paying much higher interest rates. Stay tuned!
Have more questions?
Please don’t hesitate to contact me with any questions.
At Bartley Financial, we care about way more than your finances. We care about the life you’re trying to live; finances are just a piece of that. Call us anytime if you need fresh ideas for your finances or help in achieving your goals. We’re happy to help!