"The global economic crisis is leading to a possible “developed economy” recession in the U.S. and Europe, which may be hard to alleviate, according to Pacific Investment Management Co.’s Bill Gross.
In this environment, the world’s biggest manager of bond funds favors investing in Australia, Mexico, Brazil and Canada, along with non-dollar currencies that have strong ties to the Asian continent, Gross, co-chief investment officer and founder of Pimco, reiterated. Although global equities are attractive because dividend yields in many cases are higher than bonds, they’re vulnerable to faltering growth, Gross wrote in a monthly investment commentary published on Pimco’s website today."
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In this environment, the world’s biggest manager of bond funds favors investing in Australia, Mexico, Brazil and Canada, along with non-dollar currencies that have strong ties to the Asian continent, Gross, co-chief investment officer and founder of Pimco, reiterated. Although global equities are attractive because dividend yields in many cases are higher than bonds, they’re vulnerable to faltering growth, Gross wrote in a monthly investment commentary published on Pimco’s website today."
Strife between rich and poor in the U.S. is sending Treasury yields lower, Gross wrote. The 10-year yield at 2.25 percent is “discounting a heap of trouble, and neither investor nor borrower may emerge from this brouhaha unscathed,” wrote Gross, who along with co-chief investment officer Mohamed El- Erian coined the term “new normal” more than two years ago to describe a possible long period of below average growth and high unemployment for the U.S. economy.
“We prefer the ‘cleaner’ dirty shirt countries of Canada, Australia, Mexico and Brazil, where higher yields and more pristine balance sheets prevail,” Gross wrote.
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