Need to Know: ‘Be conservative’ — Jeffrey Gundlach on how to invest in this dicey environment

Just last week, one financial industry veteran warned of “devastating losses” should a yield-curve inversion usher in the next recession. As you can see by this chart, that’s been a bankable signal over the past three decades:

Jeffrey Gundlach’s not nearly as pessimistic about the prospect of a flattening or inverting yield curve, but the billionaire founder of DoubleLine Capital isn’t exactly bubbling over, either.

The “Bond King” told Barron’s that every indicator he follows flashed positive to start the year, but now that we’re halfway through 2018, the outlook’s not so rosy and investors need to be cautious.

“There’s a narrative out there that says the flattening yield curve isn’t sending any message about a recession, and that couldn’t be more wrong,” he said.

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