New Bond King Gundlach: The US dollar will decline in the long term, buy non-US stock markets
New bond king Gundlach advises investors to sell U.S. stocks and embrace international markets, believing that the dollar has begun a long-term downtrend. He is optimistic about the performance of emerging markets, particularly India. Gundlach also predicts that the Federal Reserve will keep interest rates unchanged next week, with inflation potentially reaching 3% by the end of 2025
Jeffrey Gundlach, CEO of the American investment management company DoubleLine Capital, stated on Tuesday that as the dollar enters what he believes to be a long-term downtrend, international stocks will continue to outperform the U.S. stock market. The investment master, known as the "new bond king," is betting on a shift: the decline of the dollar's dominance.
According to the latest report from CNBC, Gundlach encouraged investors to embrace international markets during a live broadcast for investors.
I think the trading strategy should be to not hold U.S. stocks, but to hold stocks from other parts of the world. This strategy has indeed been effective. The dollar is now at the beginning of what I believe to be a long-term decline.
This judgment is not unfounded. The ICE Dollar Index has fallen about 8% this year, and Trump's aggressive trade policies have undermined confidence in U.S. assets, prompting a reassessment of the dollar's dominance in global commerce.
The investment master, who manages about $95 billion in assets, believes that investors priced in dollars can enjoy a "double benefit" if they buy foreign stocks when the dollar weakens against foreign currencies and international stocks outperform U.S. stocks.
In terms of specific target selection, Gundlach showed a clear preference:
I think it is entirely reasonable to invest in several emerging market countries, and in the long run, I still prefer to choose India. But certain Southeast Asian countries, as well as Mexico and Latin America, are also fine.
Gundlach also pointed out another potential market turning point. Due to escalating geopolitical tensions, foreign investors investing in the U.S. may curb further investments, which could create another favorable factor for international markets.
If this situation reverses, then there could be a massive sell-off. This is one of the reasons I advocate holding stocks outside of the U.S. rather than U.S. stocks.
Regarding monetary policy, Gundlach predicts that the Federal Reserve will keep interest rates unchanged at next week's policy meeting, despite the current relatively low inflation rate.
He estimates that the inflation rate could reach about 3% by the end of 2025, but acknowledges that predicting future price pressures is difficult due to the lack of clarity in Trump's tariff policies
