Gundlach Cautions That Inflated Markets and Unstable Loans Could Trigger a Financial Crisis
- Jeffrey Gundlach warns U.S. equity market is "least healthy" and predicts private credit crisis due to "garbage loans" and weak underwriting. - He advises 20% cash allocation, reduced AI/data-center speculation, and compares private credit growth to 2006 subprime crisis, citing recent firm failures. - Recommends rebalancing portfolios: 40% global equities, 25% non-dollar bonds, and 15% gold as hedge amid dollar weakness and inflation. - Criticizes AI mania as "dot-com bubble" repeat, with NYU's Damodaran
Jeffrey Gundlach, often referred to as the "bond king" and serving as CEO of
Gundlach's criticism is not limited to the stock market. He compared the explosive expansion of the $1.7 trillion private credit sector to the subprime mortgage bubble of 2006,
Despite his pessimistic view, Gundlach hasn't dismissed all investment options. He continues to regard gold as a "genuine asset class," but
His skepticism toward AI mirrors past episodes of market euphoria, like the dot-com boom. "Markets tend to overreact and overprice major changes," Gundlach observed,
The bond king's remarks come as market volatility increases. The S&P 500 has dropped 1.45% over the last month, and
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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