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Bill Gross's Investment Outlook For March : Defense !!
For me this was a big yawn. Nothing new if one has been reading his commentary the last few months. Quick translation - keep durations low, keep average maturities relatively low, avoid risk where it is obvious (i.e., if it sounds too good to be true, it probably is).
Reply to @BobC: i didn't read it as "keep duration low". I read it as "add concervative income producing investments to your barclays agg". i think he refers to credit, mortgages, utilities -- and whatever else produces income.
Reply to @fundalarm: You may be right, but it has been interesting to see how weak the BarCap Agg index has been relative to all of the actively managed funds we use. Not sure if this will continue, but also interesting to note that the "non-traditional" bond funds, as M* calls the group, have out-performed the index by a fairly wide margin, too. Some pretty smart bond managers are predicting the 10-year note to end the year between 2.5% and 3%. That could really spell trouble for funds that own long-term Treasuries, and could put BarCap Agg in a hole. The year is still young. We'll see.
"Some pretty smart bond managers are predicting the 10-year note to end the year between 2.5% and 3%."
I will presume a few scenarios for the 10 year note to find the 2.5-3% range; in no particular priority or order:
---the next U.S. president will be a republican ---global political/military tensions will have dissipated ---the lame duck congress does not allow some tax increases that would affect the middle class taxpayers ---taxation policies are firmly in place, so that a company or individual may plan more than 3 months into the future ---the economy is much stronger; thus reducing the demand for Treasury issues ---the overall economy via consumer spending is much stronger than may be suggested today ---Mr. Bernanke has come to the conclusion that the U.S./global circumstances have moved to a positive position and his fear of a scenario relative to Japan's since the late '90's and/or a continued recession here are now gone.
Comments
I mean, it's not like he sells bonds or anything.
"Some pretty smart bond managers are predicting the 10-year note to end the year between 2.5% and 3%."
I will presume a few scenarios for the 10 year note to find the 2.5-3% range; in no particular priority or order:
---the next U.S. president will be a republican
---global political/military tensions will have dissipated
---the lame duck congress does not allow some tax increases that would affect the middle class taxpayers
---taxation policies are firmly in place, so that a company or individual may plan more than 3 months into the future
---the economy is much stronger; thus reducing the demand for Treasury issues
---the overall economy via consumer spending is much stronger than may be suggested today
---Mr. Bernanke has come to the conclusion that the U.S./global circumstances have moved to a positive position and his fear of a scenario relative to Japan's since the late '90's and/or a continued recession here are now gone.
Take care,
Catch