Gundlach Recommends Balanced Portfolio With Only 25-30% Equities To Navigate High Recession Risk

Gundlach sees high recession risk in 2023-2024 and expects consumer spending to drop as rates rise. He recommends a balanced portfolio with only 25-30% in equities.
For fixed income, he likes high quality bonds yielding 7-8% and longer duration Treasuries as portfolio ballast.
For equities, he prefers value over growth and suggests exposure to international markets like India.
Gundlach recommends 25% in commodities like gold or a diversified commodity index.
His balanced portfolio yields around 7% with lower risk, including 25% Treasuries, 25% credit, 25% stocks, and 25% commodities.

marketwatch.com

Relevant topic timeline:

9/7/2023

Dividend Stocks Offer Defense Amid Recession Fears, BDCs Sixth Street and Crescent Capital Offer Double Digit Yields

Summary: Legendary investor Jeremy Grantham warns of a potential recession and decline in stock prices due to rising interest rates, but investors can protect their portfolios by investing in high-yield dividend stocks such as Sixth Street Specialty Lending (TSLX) and Crescent Capital BDC (CCAP), both of which have strong financial performance and attractive dividend yields.

10/10/2023

Experts Say Now is the Time to Buy Bonds as Rate Hikes Slow and Yields Surge

Despite disappointing performance in 2023, bond market experts believe that fixed income investments, particularly bonds, have a positive outlook due to the expectation that the Federal Reserve will soon stop raising interest rates. The rise in bond yields presents a buying opportunity, with reasonable valuations and high yields offering potential returns. However, the threat of elevated interest rates remains, impacting the value of fixed income investments. The experts advise diversifying within the fixed income asset class, considering options such as Treasuries, municipal bonds, and high-yield bonds, while being cautious about credit quality and duration.

10/10/2023

Traditional 60/40 Portfolio Faces Challenges in Current Market Conditions

The traditional 60/40 portfolio, which allocates 60% to stocks and 40% to bonds, is facing challenges due to the high correlation between stocks and bonds, indicating the need for more diversification with alternatives like gold or private credit.

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Posted 9/26/2023, 10:53:00 AM

Gundlach Recommends Balanced Portfolio With Only 25-30% Equities To Navigate High Recession Risk

Gundlach sees high recession risk in 2023-2024 and expects consumer spending to drop as rates rise. He recommends a balanced portfolio with only 25-30% in equities.
For fixed income, he likes high quality bonds yielding 7-8% and longer duration Treasuries as portfolio ballast.
For equities, he prefers value over growth and suggests exposure to international markets like India.
Gundlach recommends 25% in commodities like gold or a diversified commodity index.
His balanced portfolio yields around 7% with lower risk, including 25% Treasuries, 25% credit, 25% stocks, and 25% commodities.

marketwatch.com

Relevant topic timeline:

9/7/2023

Dividend Stocks Offer Defense Amid Recession Fears, BDCs Sixth Street and Crescent Capital Offer Double Digit Yields

10/10/2023

Experts Say Now is the Time to Buy Bonds as Rate Hikes Slow and Yields Surge

10/10/2023

Traditional 60/40 Portfolio Faces Challenges in Current Market Conditions