Gross: "New normal' may be to avoid bonds

In the “new normal” of slower economic growth and lower investment returns, Pacific Investment Management Co. LLC's Bill Gross is himself buying steady, dividend- paying stocks.
DEC 02, 2009
By  Bloomberg
In the “new normal” of slower economic growth and lower investment returns, Pacific Investment Management Co. LLC's Bill Gross is himself buying steady, dividend- paying stocks. “You want to look for stability of income and growth,” the company's managing director and chief investment officer said at a meeting of local investors in Costa Mesa, Calif. last Thursday. “That probably doesn't mean bonds.” Mr. Gross said that he is personally buying stock in AT&T Inc. and Verizon Communications Inc., for example, both stable companies that pay a 6% dividend. “You can at least bank that dividend” if markets don't cooperate, he said during the meeting, which was sponsored by Women Investing in Security and Education, an investor group. Mr. Gross also suggested that attendees look at Pimco's closed-end-bond funds, with their 10% yields.
With credit spreads narrowing, he said, all types of bonds have become “Treasury-like.” “The markets have been "de-risked,'” Mr. Gross added. In addition, he said that he is unveiling a market commentary that will address California's economic problems. The piece will be titled “Do-Do Economics,” Mr. Gross said. “It's the first time I've dared to venture into the potential negatives of my home state,” he said. California's recent budget deal was “just a sham,” Mr. Gross said, because much of the savings come at the expense of local governments. E-mail Dan Jamieson at [email protected].

Latest News

LPL adds $600M UBS team in Tennessee
LPL adds $600M UBS team in Tennessee

The firm's latest additions, led by a second-generation financial advisor, are striking out via its Linsco employee advisor channel.

eMoney supports focused financial planning with enhanced needs analysis
eMoney supports focused financial planning with enhanced needs analysis

The Fidelity-owned fintech aims to help advisors connect with mass market and mass affluent prospects with single-goal conversations.

Trump SEC pick Paul Atkins grilled by Democrats in early political test
Trump SEC pick Paul Atkins grilled by Democrats in early political test

The prospective chair of the agency has pledged to shed conflicted interests and "return common sense to the SEC."

Finra moves to boot Alpine Securities, same firm that claims the regulator can’t
Finra moves to boot Alpine Securities, same firm that claims the regulator can’t

'If I were on the side of Alpine Securities, I’d put all my eggs in the federal court,' one attorney said.

CFP Board floats new procedural rules around bankruptcy, misdemeanors
CFP Board floats new procedural rules around bankruptcy, misdemeanors

If approved, the proposed revisions would achieve outcomes similar to the existing process while reducing the burden of oversight.

SPONSORED Retirement plan balances are flourishing. Why are so many advisors missing out on a $3 trillion opportunity?

Participants who receive professional 401(k) advice see higher returns on average, net, than those who don't.

SPONSORED Focus on clients, not compliance – why Gary Corderman found his fit with Farther

This wealth management platform finally delivers on the technology promises other firms couldn't - giving advisors a better way to scale and serve