DoubleLine Capital CEO Jeffrey Gundlach said Tuesday that international stocks will continue to outshine U.S. equities on the back of what he believes to be the dollar’s secular downtrend.
“I think the trade is to not own U.S. stocks, but to own stocks in the rest of the world. It’s certainly working,” Gundlach said in an investor webcast. “The dollar is now in what I think is the beginning of [a] secular decline.”
Gundlach, whose firm managed about $95 billion at the end of 2024, said dollar-based investors who buy foreign stocks could enjoy “a double barreled wind” if the greenback declines against foreign currencies and international equities outperform.
The dollar has weakened in 2025 as Trump’s aggressive trade policies dented sentiment toward U.S. assets and triggered a reevaluation of the greenback’s dominant role in global commerce. The ICE U.S. Dollar Index is down about 8% this year.
“I think it’s perfectly sensible to invest in a few emerging market countries, and I would still rather choose India as the long term hold there,” Gundlach said. “But there’s nothing wrong with certain Southeast Asian countries, or perhaps even Mexico and Latin America.”
The widely-followed investor noted that foreigners invested in the United States could also be holding back committing additional capital due to heightened geopolitical tensions, and that could create another tailwind for international markets.
“If that’s reversing, then there’s a lot of selling that can happen. And this is one of the reasons that I advocate ex U.S. stocks versus U.S. stocks,” he said.
The investor has been negative on the U.S. markets and economy for some time, saying a number of recession indicators are starting to “blink red.”
Gundlach predicted that the Federal Reserve will stay put on interest rates at its policy meeting next week even as current inflation is “quite low.”
He estimated that inflation is likely to end 2025 at roughly 3%, although he acknowledged the difficulty in predicting future price pressures due to the lack of clarity in President Donald Trump’s tariff policy.
