Bill Gross investment outlook: “The good times are over”
Bond king Bill Gross has gazed into his crystal ball and delivered a gloomy prediction for the year ahead in his monthly investment outlook, warning investors that the time for risk taking had passed.
The investor extraordinaire said this was the moment when "common sense must recognise that the king has no clothes, or at least that he is down to his Fruit of the Loom briefs, when it comes to future expectations for asset returns".
He said historically low interest rates, which were meant to boost struggling economies, had actually stalled economic growth. This means businesses will become borrowers rather than investors, resulting in unfavourable structural shifts.
In such an environment, investors should opt for treasury and high-quality corporate bonds. He also recommended shares in companies with low debt, attractive dividends and diversified revenues.
Gross, who said he'd leave specific forecasting for a few weeks' time, summed up his outlook in a few sentences:
Beware the Ides of March, or the Ides of any month in 2015 for that matter. When the year is done, there will be minus signs in front of returns for many assets classes. The good times are over.
Gross joined Janus Capital Group in September after a surprise exit from bond fund Pimco, which he founded in 1971.
His monthly outlooks delivered on behalf of Janus Capital are often colourful, with previous letters referencing celebrities such as Justin Bieber and Paris Hilton.