Paul Tudor Jones speaks at the World Economic Forum in Davos (Switzerland), January 21, 2020.
Adam Galica | CNBC
Paul Tudor Jones, billionaire manager of hedge funds said that the environment for investors has never been worse as the Federal Reserve raises interest rates while financial conditions have become more difficult.
Jones stated Tuesday on CNBC’s “Squawk Box,” that there is no worse place than the one we have right now for financial assets.”Clearly, you don’t want to own stocks and bonds.”
The Fed is expected announce a half-percentage-point increase in its benchmark interest rates on Wednesday to curb inflation at its 40 year high.
Tudor Investment Corp.’s founder and chief investment officer believes investors are in “uncharted territory” because the central bank has only relaxed monetary policy during financial crises and economic slowdowns. He suggested that investors should be careful about capital preservation in such a complex environment.
Jones stated, “I think we’re in one those very difficult periods when simply capital preservation I think is the most important thing to strive for.” “I don’t know whether it’s going be one those periods where you’re actually trying make money.”
Many Wall Street workers are now more concerned about the possibility that the central bank could force the economy into recession while it still faces a pandemic. The central bank will likely tighten its belt to keep prices from soaring.
Jones stated, “They have inflation on one hand and slowing growing on the other. They’re going to be fighting all the time.”
A trader for over 30 years said that extreme volatility is imminent, and that he would be open to trend-following strategies. These strategies often use algorithmic model to identify price trends in markets.
Jones said, “If there were a strategy that I would choose to use right now and if someone tried to put a gun to me head, I’d say simple trends-following strategies.” They are not popular today… They will probably do very well over the next five to 10 year.”
Jones became famous after he predicted the 1987 stock market crash and made a profit.
