What happened: The Bank of America/Merrill Lynch index of high-yield debt lost 4.6 percent, falling sharply in August when China’s economy flashed warning signals and again in December after Third Avenue Management said it was liquidating a $788.5 million corporate debt mutual fund and delaying distributions to avoid bigger losses.
The call: Inflation will stay low, if not go negative, and buying Treasury Inflation Protected Securities is a bad move. “TIPS are for losers,” Gundlach said. “Inflation is going to be nonexistent.”
What happened: The cost of living barely budged through November, the most recent monthly data available. Core inflation, which excludes volatile food and energy, rose 0.2 percent for a third straight month in November, holding well below the Federal Reserve’s goal.
The call: “For those of you that want to own gold, this is as good a time as you’ve ever had in the last few years.”
What happened: Gold, which was trading at $1,234 the day of Gundlach’s presentation, rose to a high of $1,301 nine days later and ended last week at $1,097, down more than 10 percent for the year.