Bill Gross Releases Investment Outlook, 'Winning'

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Aug 24, 2022, 08:00 ET

LAGUNA BEACH, Calif., Aug. 24, 2022 /PRNewswire/ -- Legendary bond and fixed income investor William H. (Bill) Gross today released a new Investment Outlook, "Winning". In his latest Investment Outlook, Mr. Gross warns investors to avoid leverage and non-diversification, a lesson learned even before he co-founded Pimco when he was wiped out in his first bond trade. He warns, "Today's markets, both bonds and stocks, have been levered by $6-7 trillion of Fed balance sheet expansion and perhaps $5 trillion (15% of GDP) of unnecessary fiscal spending, the result of which has led to overextended stocks, ultra-low yields and the inevitable acceleration of inflation. 4-5% future inflation does not justify 2.8% 10 year Treasury yields, nor 40+ P/E ratios for many growth stocks with as-yet nonexistent earnings."

Based on the direction of Treasury Inflation-Protected Securities, or TIPS, Mr. Gross does not agree with market optimists. "Equity bulls touting 75 basis point declines in the 10 year Treasury as justification for a 15% bounce in the NASDAQ fail to recognize that the same 10 year inflation protected Treasury (TIPS) has hardly moved lower during the same period. TIPS are the key because they eliminate inflation as a risk and discount the value of future earnings more accurately. Right now, most intermediate TIPS congregate around 0%, an historically low level by at least 1%. 0% 10 year TIPS will not produce a recession strong or long enough to bring inflation back to 2%. Real and nominal yields have more to rise – a prospect unfavorable to both bond and stock markets."

Mr. Gross maintains a defensive posture in his portfolios, and recommends others do the same. Full text of Bill Gross's May 26, 2022, Investment Outlook can be found at his website.

About Bill Gross

Bill Gross has been a pioneer in fixed income investing for more than 40 years. He co-founded PIMCO in 1971 and served as managing director and chief investment officer until joining Janus Henderson Investors in 2014. He retired in 2019 to focus on managing his personal assets and private charitable foundation. Throughout his career, he has received numerous awards, including Morningstar Fixed Income Manager of the Decade for 2000 to 2009 and Fixed Income Manager of the Year for 1998, 2000 and 2007. Mr. Gross became the first portfolio manager inducted into the Fixed Income Analysts Society's Hall of Fame in 1996 and received the Bond Market Association's Distinguished Service Award in 2000. In 2011, Institutional Investor magazine awarded him the Money Management Lifetime Achievement Award. Mr. Gross oversees the $390 million-asset William, Jeff and Jennifer Gross Family Foundation, which annually donates up to $21 million to non-profits involved in humanitarian causes, health care, and education. For more information or to view Investment Outlook archives, please visit https://williamhgross.com. For information about Mr. Gross's philanthropic activities through the William, Jeff and Jennifer Gross Family Foundation, please visit https://grossfamilyfoundation.com/. Order his new book "I'm Still Standing: Bond King Bill Gross and the PIMCO Express" on Amazon.com.