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Gary Shilling

Portfolio > Investment VIPs

Gary Shilling: 5 Strategies for Investors Now

By Dinah Wisenberg Brin

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Economist and investment advisor A. Gary Shilling continues to see recession indicators while noting many in the market remain optimistic about a so-called soft landing that would sidestep a downturn.

“Hopes for an economic soft landing for the U.S. economy and interest rate cuts by the Fed are widespread, despite continuing and reliable recession harbingers like the inverted Treasury yield curve and the depressed level of the leading economic indicators index,” he noted in his April Insight newsletter, released Tuesday.

“Equity investors have been in a feeding frenzy for the spectrum of speculative areas including bitcoin and AI.” 

Shilling had maintained nine key investment themes from May 2022 until his March newsletter, released in February, when he shifted to five. One change cited: The advisor was no longer recommending short positions because, as he has stated for decades, “Markets can remain irrational a lot longer than we can remain solvent.”

Shilling mildly tweaked those five in the current newsletter. Given the current economic and investment climate, he suggested investors:

  • “Long the U.S. dollar against other major currencies as the world’s premier safe-haven and as relatively-high interest rates attract foreign money.
  •  Long Treasury bonds, which have rallied since mid-February and should rise as the Fed eases credit. 
  • Avoid vastly overpriced speculative stocks such as the Magnificent Seven, AI, SPACs and crypto securities.
  • Switch Asian investments from China to India. (Shilling’s note cited several reasons why he considers investment prospects better in India than in China.)
  • Hold extra cash to prepare for later economic and financial market strength.”

Pictured: Gary Shilling

Dinah Wisenberg Brin

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