Venture capitalist Kevin O’Leary says investors would “take a hit” if they were in long-term bonds right now.
His comments come hours after Federal Reserve Raising interest rates by 75 basis points – The biggest central bank hike since 1994.
“I’m not going to buy bonds here,” O’Leary Ventures chairman O’Leary Ventures said in an interview with CNBC’s Squawk Box Asia on Thursday.
“I’m not going to allocate 3 and a quarter percent of the capital for 10 years,” he said. “These are terrible returns when the markets have traditionally given me 6 to 9 percent.”
Right now, I prefer stocks, especially the 100 companies in the S&P 500 that have very strong balance sheets
President of O’Leary Ventures
“Is there anything on the fixed income scale that I think makes sense? Not yet,” O’Leary said.
“Right now, I prefer stocks, especially the 100 companies in the S&P 500 that have very strong balance sheets. Very strong cash flow, dividend payouts that haven’t yet experienced this so-called slump,” the investor said.
Global markets have tumbled in recent weeks as investors race for safety on the back of mounting concerns — from aggressive policy tightening in the United States to a global recession, and the economic impact of prolonged lockdowns in China as Beijing continues to stick to its Covid-free strategy. .
on Wall Street, The S&P 500 slipped into bear market territory earlier this monthAnd it’s still down more than 20% so far this year.
For his part, O’Leary said he does not see a “dramatic recession” in the future.
“There are a lot of naysayers out there, a lot of people talking about the apocalypse of the free world as we know it, the darkness and all that and the collapse of cryptocurrency and yada yada,” said the investor at Shark Tank.
“I’m not there because I’m dealing with the numbers every week, for what consumers buy with the money they have, they’ve got a lot of it in the past three years.”
The economy remains strong and could sustain a rate hike by the US central bank, according to O’Leary.
“If the Fed ends up at 4%, that’s still a historical low. That’s not crazy and that’s what we’re talking about.”
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