DoubleLine Capital CEO Jeffrey Gundlach said the bond market has not looked this attractive in the past decade. "If you really want to go for it and you should, my advice [is] sell stocks and buy opportunistic bonds," Gundlach said in an investor webcast Thursday. "It was brutal to be a bond investor for the past several years but now it's actually the place to be and the opportunities are more exciting now than any time, in my view, in the past 10 years." The so-called bond king said there are multiple buying opportunities in mortgage-backed securities and the high yield bond market. Investors can possibly achieve a capital gain potential of 10% or even 15% in the bond market, he said. "You want to own Treasurys mixed with risky credit, and that way you have some sort of a hedge and offset," Gundlach said. Gundlach said the Federal Reserve is oversteering the economy with its aggressive rate hikes, and chances are deflationary forces are looming, which will force the central bank to reverse its current monetary policy. "Unfortunately, the Fed is going make their typical mistake of over-tightening," Gundlach said, adding that the Fed should "stop and assess" its tightening cycle. The Fed is expected to approve next week a third consecutive 0.75 percentage point interest rate increase that would take benchmark rates up to a range of 3%-3.25%. Gundlach said the central bank should raise rates by just 25 basis points instead. Gundlach revealed that his DoubleLine Capital bought long-term Treasuries last week.
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