Gross: Australia, Mexico, Brazil are Better Bets than the U.S., Europe
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Bill Gross is expecting some bad times for the U.S. and European economies, and is putting his money to work elsewhere.
In a monthly statement issued on PIMCO's website, the "Bond King" said he is investing in Australia, Mexico, Canada, Brazil, as well as other non-dollar currencies with stronger ties to Asian economies. Gross believes although global equities are attractive to invest in due to higher dividend yields, this segment also faces exposure to faltering economies.
The increasing gap between the rich and poor is pushing yields lower, Gross argued. Currently at 2.25 percent, the 10-year Treasury yield is "discounting a heap of trouble, and neither investor nor borrower may emerge from this brouhaha unscathed."
In Brazil, Mexico, Canada, and Australia, cleaner balance sheets and higher yields rule the roost.
Gross contends the European debt crisis gets the most worry, because Greece, Ireland, or Portugal may be forced to leave the euro. If this ends up happening, "technically destabilizing liquidity concerns may affect all peripheral bond markets unless the ECB counters the rush for the exits with an enlarged daily checkbook."
European confidence in August plunged to its lowest level in nearly three years. The EC also reported Tuesday consumer sentiment fell from 103 in July to 98.3 in August, it's lowest point since May 2010.
In a monthly statement issued on PIMCO's website, the "Bond King" said he is investing in Australia, Mexico, Canada, Brazil, as well as other non-dollar currencies with stronger ties to Asian economies. Gross believes although global equities are attractive to invest in due to higher dividend yields, this segment also faces exposure to faltering economies.
The increasing gap between the rich and poor is pushing yields lower, Gross argued. Currently at 2.25 percent, the 10-year Treasury yield is "discounting a heap of trouble, and neither investor nor borrower may emerge from this brouhaha unscathed."
In Brazil, Mexico, Canada, and Australia, cleaner balance sheets and higher yields rule the roost.
Gross contends the European debt crisis gets the most worry, because Greece, Ireland, or Portugal may be forced to leave the euro. If this ends up happening, "technically destabilizing liquidity concerns may affect all peripheral bond markets unless the ECB counters the rush for the exits with an enlarged daily checkbook."
European confidence in August plunged to its lowest level in nearly three years. The EC also reported Tuesday consumer sentiment fell from 103 in July to 98.3 in August, it's lowest point since May 2010.
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William H. Gross, Pacific Investment Management Company, LLC (PIMCO), DividendSign up for StreetInsider Free!
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