Speaking yesterday on the recently resurrected television show Wall Street Week, DoubleLine Capital CEO Jeffrey Gundlach said he fears that the next major financial crisis could be the junk bond market.

Gundlach noted that the entire “life of the junk bond market occurred” during an era of rising interest rates. Prior to the early 1980s, what was the junk bond, or fallen angel, market was so tiny and fragmented it really wasn’t a market.

Gundlach believes interest rates are likely to remain quite low for the next 18 to 24 months. That gives investors time to prepare for the coming rise in rates that looms. “It’s OK to stick” with junk bond and emerging markets bonds for now, he says.

The reason is that there aren’t a lot of bonds maturing with a need to be refinanced between now and 2017. All that is likely to change in 2018, when more than $300 million each in junk bonds and Treasury bonds come due.

Gundlach speculated that because junk bonds held up fairly well during the taper tantrum, investors may be lulled into thinking they can handle a big increase in overall interest rates. That could be a mistake.

Huge amounts of investment-grade debt and bank loans will also mature in 2018 through 2020. Coincidentally, this will occur at exactly the same time as the big bulge of baby boomers start turning 65, throwing the federal government’s entitlement problems into full view.

“When Treasury yields go up,” junk-bond yields could rise a lot more, Gundlach predicted. Suddenly, all different types of bond issuers could find themselves competing for capital and if everyone is forced to pay higher rates, junk-bond issuers could be the biggest losers.

“I’ve heard of guys bragging about buying negative yield bonds because they sold higher,” he said. “To me, that’s like trying to pick up dimes in front of a steamroller.”

Gundlach also declared that investors reaching for yield in such investments as MLPs and shopping-mall REITs could be flirting with disaster. “I also marvel at how highly valued shopping-mall REITS are because we are in a secular downward death spiral for shopping malls,” he said. “I’m talking about things like MLPs, which are massively leveraged. If interest rates rise, their margins will collapse.”

Earlier this month, DoubleLine's Total Return Fund celebrated its five-year track record. Since inception of April 6,2010, the fund has earned annualized returns of 8.65% for its institutional shares compared to 4.54% for its benchmark, the Barclays U.S. Aggregate index. What advisors have found particularly attractive is its five-year Sharpe ratio of 3.73 versus 1.62 for the Barclays.