DoubleLine Capital Chief Investment Officer Jeffrey Gundlach recommends shorting the S&P 500 Index and buying emerging market stocks despite conventional wisdom that increasing U.S. rates will lead to a stronger dollar.
Further, Gundlach suggests wagering long on the iShares MSCI Emerging Markets exchange-traded fund, and betting against the SPDR S&P 500 ETF. He then added that it’s a myth that the Federal Reserve raising rates necessarily leads to a stronger dollar.
“What the heck, let’s have some fun,” Gundlach, said at the Sohn Investment Conference in New York. “Let’s leverage it one time.”
Bond investor Gundlach has built a career making prescient market calls. Last year, he correctly predicted that Donald Trump was likely to be the next U.S. President.
Moreover, on a May 2 webcast, he advised sticking with gold and emerging-market debt while warning the stock market may face a correction and oil prices are likely to fall.
Read more at Bloomberg.