Bill Gross says the good times are over and negative returns are coming for most assets.
In his latest investment outlook published on Tuesday, Janus Capital’s Bill Gross warns investors to beware the Ides of March, “or the Ides of any month in 2015 for that matter.”
“When the year is done, there will be minus signs in front of returns for many asset classes. The good times are over.”
In his December investment outlook, Gross sounded increasingly bearish — if not on specific investments, he was bearish on the broader monetary policy experiment undertaken since the financial crisis — and his January outlook shows increasing concern over the state of financial markets.
“Timing the end of an asset bull market is nearly always an impossible task, and that is one reason why most market observers don’t do it,” Gross writes.
“Nevertheless, there comes a time when common sense must recognise that the king has no clothes, or at least that he is down to his Fruit of the Loom briefs, when it comes to future expectations for asset returns. Now is that time and hopefully the next 12 monthly ‘Ides’ will provide some air cover for me in terms of an inflection point. Manias can outlast any forecaster because they are driven not only by rational inputs, but by irrational human expressions of fear and greed. Knowing when the ‘crowd’ has had enough is an often frustrating task, and it behooves an individual with a reputation at stake to stand clear.”
Last month, Gross told investors that it might be time to take some chips off the table, and this month he echoes a similar sentiment.
“Debt supercycles in the process of reversal are not favourable events for future investment returns. Father Time in 2015 is not the babe with a top hat in our opening cartoon. He is the grumpy old codger looking forward to his almost inevitable ‘Ides’ sometime during the next 12 months. Be cautious and content with low positive returns in 2015. The time for risk taking has passed.”
Despite his generally downbeat tone, this is an investment outlook for Janus clients after all, and Gross says that in a “strange new world’ where investors have trouble finding returns anywhere, Treasury and high-quality corporate bonds, as well as “equities of lightly levered corporations with attractive dividends and diversified revenues both operationally and geographically,” could serve as attractive investments.
As for the specific warning that people need to beware “all Ides”? Well, it’s still Bill Gross.