Jeffrey Gundlach: Now's the Time to Diversify Your Portfolio

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Gundlach: Bond market 'ridiculously' oversold

Doubleline Capital founder & CEO Jeffrey Gundlach explains why it's a good time to tweak bond investments.

U.S. stocks are poised for even more record highs in 2016, according to DoubleLine Capital founder Jeffrey Gundlach, who said he expects moderate gains from current levels.

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In an exclusive interview with FOX Business Network’s Liz Claman, Gundlach was optimistic about Wall Street’s 2017 performance, but noted there could be some volatility on the horizon.

“I think the problem will come in the middle of the year when interest rates—which are now dropping a little bit because the bond market is ridiculously oversold and positioned against—but ultimately I think interest rates will move higher toward 3% on the 10-year.”

While U.S. stocks have been on a tear since November and the election of Donald Trump to the White House, Gundlach says portfolios shouldn’t be too U.S.-focused.

“A lot of other markets have not done nearly as well [as the U.S.], and they look kind of cheap. So I think investors should think about diversifying, using this relative weakness in foreign markets to diversify away from the U.S.,” he explained.

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Additionally, the DoubleLine Capital founder and CEO said he thinks the incoming Trump administration, which proposes more business-friendly regulations, will be another catalyst for upward momentum.

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“I think we’re going to see a short-term bump in economic growth. We’ll certainly see some signs of growing inflation,” Gundlach said.

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