'Contrarianism is overrated': Stan Druckenmiller says invest in US stocks but hedge the dollar. Here’s how

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Billionaire capitalist Stanley Druckenmiller says helium has a elemental mentation for however helium built his fortune.

“I person this acquisition for compounding money,” the hedge money manager precocious said successful a Morgan Stanley interrogation (1).

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Druckenmiller, who ran Duquesne Capital for decades and famously helped George Soros marque billions betting against the British lb successful 1992, has agelong been regarded arsenic 1 of the astir palmy macro investors of his procreation (2).

Druckenmiller reportedly delivered mean yearly returns of astir 30% for 3 decades without a losing year, making him 1 of the astir palmy hedge money managers successful past (3).

Now he’s sharing however he’d attack markets if helium had to commencement gathering a portfolio from scratch today.

His answer? Lean into the spot of the U.S. economy, but hedge the risks that travel with it.

Despite concerns astir precocious valuations and an AI bubble, Druckenmiller says the U.S. system remains 1 of the champion concern stories successful the world.

“The U.S. system is beardown and getting stronger,” helium said, pointing to fiscal stimulus and the anticipation of involvement complaint cuts ahead.

That doesn’t mean helium believes markets are cheap.

“We’re toward the apical of the valuation scope historically,” helium warned.

Still, Druckenmiller says investors shouldn’t obsess implicit being contrarian.

“Contrarianism is overrated,” helium said successful the interview. “Consensus is close 80% of the time. I don’t attraction if a commercialized is crowded if I deliberation the inclination is with me.”

For mundane investors, 1 elemental mode to align with the billionaire’s proposal is by investing broadly successful the U.S. banal marketplace — peculiarly the S&P 500, which tracks galore of the country’s largest companies.

This is besides a favourite strategy of legendary capitalist and erstwhile Berkshire Hathaway CEO Warren Buffett.

“The extremity of the non-professional should not beryllium to prime winners,” Buffett wrote successful his 2013 missive to shareholders (4).

Rather, retail investors should look to carve retired a “cross section” of America’s champion that “in aggregate” tin beryllium expected to bash well. Buffett has besides taken his ain advice, stipulating that 90% of the currency reserves inherited by his woman aft his passing should beryllium invested successful the S&P 500.