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George Soros: Bearish on US Stocks, Invested in US Treasury Bonds

Surbhi Jain

Deflationary Pressures Rising: Where Is Soros Putting His Money?

(Continued from Prior Part)

Where is George Soros putting his money?

Investment advice from the billionaire investor and hedge fund manager, George Soros, is almost market moving. Soros has the credit of predicting the United Kingdom’s pound devaluation in 1992, the rise of Germany’s mark after 1989, as well as the Japanese stock fall in 1989. He predicts that we’re currently heading toward a repeat of 2008. This market pundit, whose net worth crosses $24 billion, has been shorting the S&P 500 Index while being long on US Treasuries.

What has George Soros been shorting?

In his recent interview with Bloomberg Television at the World Economic Forum, Soros revealed that he has been shorting:

  • the S&P 500
  • countries that produce raw materials
  • currencies against the dollar

This is definitely critical news for investors in ETFs that track the S&P 500 such as the SPDR S&P 500 ETF (SPY), the iShares Core S&P 500 (IVV), and the Vanguard 500 ETF (VOO). The Direxion Daily S&P500 Bull 3X ETF (SPXL) also has about 80% of its assets invested in securities that comprise the S&P 500 Index. The fund seeks to deliver daily investment results, before fees and expenses, of 300% of the performance of the S&P 500 Index.

Soros is bearish on US stocks

While Soros is bearish on US stocks, commodity-producing countries, and Asian currencies, he is invested in US Treasury bonds. With market uncertainty heightening, we may see investors rushing in to park their money in safe-haven US Treasury. For investors seeking to gain exposure to US Treasury bonds, the iShares 20+ Year Treasury Bond (TLT) and the iShares 7-10 Year Treasury Bond (IEF) could be good options.

Though Soros doesn’t think the Federal Reserve would go in for any rate hikes this year, for those who continue to believe that the Fed would actually hike rates further in 2016, investing in the short-term Treasury tracking iShares 1-3 Year Treasury Bond ETF (SHY) might serve well. By investing in short-term debt, an investor could have the opportunity to roll-over to the higher yielding bond as interest rates rise.

There are other market barons who’s investment picks quite closely match those of George Soros. Let’s discuss that in our next article.

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