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Paul Tudor Jones says he can’t think of a worse financial environment for stocks or bonds right now

Paul Tudor Jones speaking at the World Economic Forum in Davos, Switzerland, January 21, 2020.

Adam Galica | CNBC

Billionaire hedge fund manager Paul Tudor Jones said the environment for investors is worse than ever as the Federal Reserve raises interest rates as financial conditions have already become increasingly difficult.

“You can’t imagine a worse environment than the one we find ourselves in now for financial assets,” Jones said Tuesday on CNBC’s “Squawk Box.” “Clearly you don’t want to own bonds and stocks.”

The Fed is expected to announce a half-percentage point hike in its benchmark interest rate on Wednesday, to rein in inflation soaring to its highest level in 40 years.

The founder and Chief Investment Officer of Tudor Investment Corp. believes investors are now in “uncharted territory” as the central bank has only eased monetary policy during past economic downturns and financial crises. He said investors should prioritize preserving capital in such a difficult environment for “virtually anything”.

“I think we’re in one of those really tough times where just capital preservation is, I think, the most important thing we can strive for,” Jones said. “I don’t know if this will be one of those times when you’re actually trying to make money.”

Many on Wall Street are increasingly concerned that the central bank could tip the economy, still in the midst of a pandemic, into recession with aggressive tightening to control soaring prices.

“They’ve got inflation on one side, slowing growth on the other, and they’re going to go head-to-head all the time,” Jones said.

With extreme volatility ahead, the longtime trader said he would consider owning trend-following strategies, which often use algorithmic models to identify price trends in the markets.

“If there was one strategy I would want to employ right now, if someone was pointing a gun to my head, I would say simple trend-following strategies,” Jones said. “They’re not too popular today… They’ll probably do very well in the next 5-10 years.”

Jones rose to fame after predicting and profiting from the 1987 stock market crash. He is also president of the nonprofit Just Capital, which ranks US public companies based on social and environmental metrics.

Paul Tudor Jones says he can’t think of a worse financial environment for stocks or bonds right now

Source link Paul Tudor Jones says he can’t think of a worse financial environment for stocks or bonds right now

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