The Great Escape: Delivering in a Delevering World - Bill Gross

PIMCO’s latest Investment Outlook by Bill Gross: The Great Escape: Delivering in a Delevering World

·         How do we deliver in this New Normal world that levers much more slowly in total and can delever sharply in select sectors and countries?

·         When interest rates cannot be dramatically lowered further or risk spreads significantly compressed, the momentum begins to shift, not necessarily suddenly, but gradually - yields moving mildly higher and spreads stabilising or moving slightly wider.

·         In such a mildly reflating world, unless you want to earn an inflation-adjusted return of minus 2%-3% as offered by Treasury bills, then you must take risk in some form

·         We favor high quality, shorter duration and inflation-protected bonds; dividend paying stocks with a preference for developing over developed markets; and inflation-sensitive, supply-constrained commodity products.