And why would he be right this time, when he was so wrong the last time ?
Pimco's Bill Gross: The No. 1 strategy investors should be using now
Pacific Investment Management Co.'s Bill Gross said investors should embrace a defensive strategy because of the limits of zero-bound interest rates and systemic debt risk in global financial markets.
"An instant replay of these past few decades would have shown that accelerating asset prices weren't due to any particular wisdom on the part of academia or the investment community but an offensively minded Federal Reserve and their global counterparts who were printing money, lowering yields and bringing forward a false sense of monetary wealth that was dependent on perpetual motion," Gross wrote in a commentary posted on Newport Beach, California-based Pimco's website today.
Emphasize income, de-emphasize derivative structures that are fully valued and be willing to accept returns lower than historical averages, Gross wrote.
The period of muted growth in developed economies, high unemployment and orderly deleveraging, Pimco dubbed the "new normal" in the aftermath of the 2008 financial crisis is morphing into a world of credit and zero-bound interest-rate risk, Gross said last month.
"The offensively oriented investment world that we have grown so used to over the past three decades is being stonewalled by a zero bound goal-line stand," Gross, the founder and co-chief investment officer of Pimco, wrote today. "Investment defense is coming of age."
Source: Bloomberg