“Investors need to be worried about inflation. But it’s not a stagflation world yet,” Jeffrey Sherman, deputy chief investment officer at DoubleLine, tells ThinkAdvisor in an interview. “The best asset class to hedge against inflation is commodities,” he argues. The lead portfolio manager for multi-sector and derivative-based strategies at DoubleLine, of which Jeffrey Gundlach is CEO, Sherman forecasts inflation next year at about 3.5%. The current rate is 5.4%. As for the stock market and overall U.S. economy, both will further “moderate.” But “that doesn’t mean we’re going into a contraction,” Sherman, based in Los Angeles, says.
In fact, his outlook for the corporate-environment economy for the next 12-18 months is, in his own words, “pretty rosy.” Next year, he expects 3%-4% growth even as earnings growth will slow, he predicts.