DoubleLine Capital’s Jeff Gundlach advised investors in a webcast to stick to companies with strong balance sheets as reported by CNBC.
He suggests that the steepening bond yields will eventually hurt stocks in 2019.
He also believes a bullish move could be in store for Bitcoin where it could rise to $5,000.
Bitcoin Is Risky but “Could Make it to $5,000”
According to Gundlach, Bitcoin could gain as much as 25% this year, by increasing to $5,000, though he doesn’t really recommend investing in Bitcoin.
He previously said that Bitcoin is the “poster child for social mood and market mood.”
Though this potential target set by Gundlach is fairly conservative in comparison to other market expert predictions, if it becomes a reality it could help boost the wider crypto market.
Any bullish movement seen in Bitcoin would provide some welcome relief to many BTC investors after a prolonged crypto winter.
“I don’t recommend anything with bitcoin, really … but if you really want to speculate, I think it could make it to $5,000. Talk about an easy 25 percent.”
However, he also advised the investors to “get the heck out of bitcoin.”
These comments by Gundlach indicate that he believes a bullish run is ahead for Bitcoin, but it is evident that he himself is not a fan of digital currencies.
Many of his predictions related to the market have come true in the past, including the large-scale sell-off in stocks in December.
Higher Yields to Hit Stocks
Gundlach is known as the ‘bond king’ and currently manages over $200 billion in assets.
He said that 2019 would be a volatile year for stocks and that higher yields will hurt them, calling it a “tug of war.”
The Federal Reserve has a tightening agenda, and Fed chair Jerome Powell also indicated that they are in no hurry to hike rates while they patiently monitor the economy.
Gundlach correctly predicted the end of 2018 sell-off.
Also, in mid-Decemebr he said that he was sure it was a bear market and the S&P would go lower, even when it had fallen by 11% already. This prediction also came true a week later on Christmas Eve.
He now believes that the yield curve of bonds will become steeper this year. Wall Street is worried that an inverted yield curve could drive the economy into a recession.
He also warned that growing leverage on a company level and government level are a cause of concern.
He advised investors to get out of junk bonds and to find companies with strong balance sheets.