Bill Gross,co-founder of Pacific Investment Management Company,or PIMCO,sees stubbornly high or even increased unemployment for 2013,resulting in weak fixed income and stock returns and a surge in gold prices.Mr.Gross issued his firm's "Fearless Forecast" for the new year recently.It shows basically that the economy will trundle along in the new normal as defined by PIMCO:high unemployment;slow growth;and orderly deleveraging by developed countries.
GDP growth will be 2% or less on account of globalisation,deleveraging and demographic headwinds.Stocks and bonds will return less than 5%.The market will also lack the tailwind of the Fed's quantitative easing.The future price tag of Fed policies will be in the form of inflation and devaluation of currencies,relative either to themselves or to the prices of commodities in less limitless supply,such as oil and gold.
Future growth must come from investment in education and infrastructure.It has to be less consumption-oriented.It takes a determination and a primal-spirited momentum to put this economy back in the hands of the private sector.
Mr.Gross manages the company's iconicTotal Return Fund,which returned a strong 10.5% in 2012.The economy and global economy are limited,he pointed out.PIMCO is a two trillion dollar firm.We'll cross our fingers and we won't be totally confident,but we think we can do it again,the"Bond King"predicted.
PIMCO Total Return Fund Instl(PTTRX)
No comments:
Post a Comment