Gundlach: The Long-Term Value Is in Emerging Markets

Bond guru Jeffrey Gundlach of DoubleLine Capital held an "about markets" presentation. In this webcast, he discussed the market environment. You can register and watch the entire event here. For now, I will list the key recommendations Gundlach makes on how to invest in this market.

Gundlach is very good at reading the economy. As he is adept at foreseeing problems in the market, his insights are super useful. He strongly believes the Federal Reserve wants inflation to be higher. They are pursuing strategies to ensure that. As a result, he outlined several things he expects to happen in the near future:

  • Gundlach expects the dollar to weaken in the months ahead, and it is the key to all of his other recommendations.
  • The dollar is going to weaken in the months ahead.
  • A weak dollar should lead to higher commodity and gold prices.
  • He likes gold a lot as a long-term play.
  • He doesn't mind commodities as a theme in 2020.
  • Favors non-u.s. equity markets.

A weak dollar is a real tailwind for emerging markets that Gundlach favors over U.S. markets. He doesn't like European markets either. though. He also thinks the risk premium in oil isn't big enough. That's certainly something I agree with.

Bernie Sanders is the biggest risk in 2020. He's leading on the online prediction markets over other Democrats. He is not a favorite against Tump. Gundlach now thinks Treasury inflation-protected bonds are attractive. He wholly recommends a permanent gold allocation. He also thinks bitcoin could go to $15,000, but he liked it better last year. : This won't be the roaring '20s, but it won't be the boring '20s either. In other words, volatility is coming.

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This article first appeared on GuruFocus.