Bill Gross: Returns will be half what they were

Investors shouldn't expect returns and profits ever to get back to the levels of a few years ago, Bill Gross, managing director and co-chief investment officer at Pacific Investment Management Co. LLC, told attendees of InvestmentNews' Virtual ETF Insights online conference this morning.
JAN 06, 2010
Investors shouldn't expect returns and profits ever to get back to the levels of a few years ago, Bill Gross, managing director and co-chief investment officer at Pacific Investment Management Co. LLC, told attendees of InvestmentNews' Virtual ETF Insights online conference this morning. “The new investment market is what we call the new normal,” Mr. Gross said in his keynote speech. “It's a world where growth slows down and where investment returns are half of what we have grown used to over the past 10 to 25 years.” Mr. Gross cited several reasons that advisers should lower their, and clients', expectations: • The United States is deleveraging as a result of the subprime mortgage crisis. “That means that banks don't loan money like they used to and it basically means that the small investor doesn't take risk as much as they had used to.” • The government's push to “re-regulation,” will keep profits and growth in check. “It probably slows the economy down,” Mr. Gross said. “To us, regulation and re-regulation are not an investor's friend.” • In a new climate of “de-globalization,” other countries are focusing more on their internal growth rather than expanding trade. As a result of these three factors, economic growth will be half of what it was—averaging around 4% annually. Profits will remain around 4% to 5%, instead of the previous levels of 8 to 9%, Mr. Gross said. Similarly, investors shouldn't expect the double-digit returns of the old days, Mr. Gross said. “This isn't a forecast that says, ‘Bear market, run for the hills,'” Mr. Gross said. “It's a world where if we have less growth, less leverage and the inability to siphon funds from Main Street to Wall Street, you'd better expect rates of return in the general vicinity of 5% to 6% total.”

Latest News

The 2025 InvestmentNews Awards Excellence Awardees revealed
The 2025 InvestmentNews Awards Excellence Awardees revealed

From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.

Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty
Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty

Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.

Edward Jones joins the crowd to sell more alternative investments
Edward Jones joins the crowd to sell more alternative investments

“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.

Record RIA M&A activity marks strong start to 2025
Record RIA M&A activity marks strong start to 2025

Sellers shift focus: It's not about succession anymore.

IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients
IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients

Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.