When the two biggest bond investors are shunning equities and bond markets, and putting their money into tangible assets like gold, it's time to take notice. Fixed-income markets dwarf equities, and bond investors are better predictors of the economy--even if they don't make the financial headlines like stock pickers do.
Bond investors are often labeled the smart money because they have a better track record of foretelling economic downturns, as equities analysts are understandably polyannish.
Jeff Gundlach and Bill Gross have recently turned bearish on traditional financial assets and bullish on gold. A contrarian may hesitate in following these iconic money managers. But sometimes investors can out-think themselves. While these two bond kings have influence on Wall Street (despite being headquartered in southern California), the average Joe wouldn't recognize these two star fund managers from Bernie Madoff. And that's a good thing if one is a contrarian.