Quartz, Aug 3, 2016
Two of the financial world’s most high-profile, outspoken investors, Bill Gross and Jeffrey Gundlach, have some eye-catching advice for investors.
“I don’t like bonds; I don’t like most stocks; I don’t like private equity,” Gross, a fund manager at Janus Capital once known as the “bond king” of Pimco, wrote in his monthly investment outlook for August.
Gundlach, who manages more than $100 billion in assets at DoubleLine Capital, was even more direct in an interview with Reuters at the end of last week: “Sell everything.”
Both investors say that gold, the traditional safe haven that investors turn to when anxiety is high, is a better bet these days, even as prices are currently at their highest levels in more than two years:
Slow global economic growth, low and negative interest rates, and the economic shock of the Brexit vote have combined to unsettle investors. And so they are looking further afield to identify assets that might make money.
Gross suggests buying “real assets” such as gold and land. Gundlach is also a fan of gold, and the stocks of gold-mining companies, especially as an alternative to the “horrific” risk-return prospects for US government bonds.
Although stocks have been soaring of late, with the S&P 500 recently reaching an all-time record high, Gundlach thinks equity investors are deluded. Economic growth is weak and corporate earnings are stagnant, he noted. “The stock markets should be down massively but investors seem to have been hypnotized that nothing can go wrong,” he told Reuters.