Jeffrey Gundlach, chief executive officer of DoubleLine Capital LP, said stocks won’t repeat the poor performance they had from 2000 to 2010.
“Equities may be challenged in the near term,” Gundlach said today at the Bloomberg Markets 50 Summit in New York. “But I doubt you’re going to have this lost decade or lost 15 years of equities again.”
The Standard & Poor’s 500 Index (SPX), the benchmark index for large U.S. stocks, fell 14 percent from the beginning of 2000 through the end of 2010, failing to replicate long-term historic gains. Gundlach is considering adding stock funds to the bond lineup at DoubleLine, he said earlier this week.
“I like the way equities are out of favor and I like doing things when they’re unpopular,” he said in a telephone interview Sept. 11. “Equities are a superior investment to bonds for an inflation hedge and I like the ability to diversify and broaden the firm.”
U.S. Treasury 30-year bonds have “incredible downside,” Gundlach said at today’s event. The Federal Reserve didn’t include U.S. government debt as part of a third round of asset purchases, and its rate-setting committee pledged to keep monetary policy accommodative even when the economy strengthens.
Stocks in China are a better bet than stocks in the S&P 500 Index, Gundlach said. Equities in European countries such as Spain were attractive in May and investors should sell them now, he said.
DoubleLine, founded by Gundlach and President Philip Barach in December 2009 and based in Los Angeles, has more than $40 billion in assets. The $32 billion DoubleLine Total Return Bond Fund (DBLTX) returned 7.3 percent this year through yesterday, beating 96 percent of peers, according to data compiled by Bloomberg.
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