Investors Likely to Lose on Cash and Bonds. Those are “Investment Garbage” – Pimco Co-Founder

Source: Bloomberg

Pimco co-founder, who was once a bond king, has equated them to an “investment garbage” that is similar to cash.  US 10-year Treasury yield is 1.296%.

• Gross says long-term yields on Treasuries are low, equating funds that buy them to an “investment garbage can.”
• The investor says ten-year yields would likely rise to 2% in the next 12 months, from the current 1.3%, which will cause a loss of about 3% to investors.
• Gross also feels that stocks can easily fall into the “trash” category if earnings fail estimates.
• The Pimco co-founder says supply and demand dynamics are weighing against the Treasuries, saying that current yields have to go higher.
• Gross has held bearish positions on bonds. In March, he said he was betting against Treasuries at the 1.25% rate.