Bill Gross, co-chief investment officer at fund giant Pimco, says 2013 won’t be a year of great opportunities in financial markets.
“I’m afraid there are going to be ashes in our stocking this year,” he tells The New York Times. “And that applies to almost all asset classes. Bonds are priced not just for perfection, but with close to 0 percent yields.”
The 5-year Treasury yield closed at 0.78 percent Friday. “The juice has been squeezed out of the orange,” Gross says.
Editor's Note: The Final Turning Predicted for America. See Proof.
To be sure, he doesn’t expect interest rates to soar either.
“I don’t see a lot of risk in bonds,” Gross says. “The Federal Reserve is buying, and there’s no real risk until the Fed declares the war is over.” The central bank is purchasing $85 billion of Treasurys and mortgage-backed securities a month.
The Fed plans to keep interest rates unchanged until unemployment hits 6.5 percent. “By any reasonable standard, that’s going to be a long time coming — certainly not in 2013, and probably not for at least two to three more years,” Gross notes.
Not everyone has tepid feeling about bonds. Independent economist Gary Shilling sees them rising this year, thanks to a recession.
"I think you play it with a 'risk-off' kind of approach," he told Yahoo last month. "And that means you probably look for more appreciation in long-term Treasury bonds, which have been a favorite of mine since 1981."
Editor's Note: The Final Turning Predicted for America. See Proof.
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