New York– Mea culpa, says Bill Gross in his newest newsletter. I got it right, but I got it wrong
Let’s walk back to the first quarter when Gross called German Bunds the “short of a lifetime.” So Janus Capital investors would expect to be tallying their profits on this trade. Unfortunately not. In his most recent investment outlook for Janus Gross says the call was “well timed but not necessarily well executed.”
Don’t fret. Opportunities abound for investors, says Gross. We have entered a new age of investing. Say thanks to the world’s central banks. As a result, investors can’t assume markets will return to historic “norms.” Changes are happening at different paces in different countries necessitating adaptation, as Gross’ own ideas have developed from “the new normal” in 2009 to “the new natural policy rate” in 2014 have shown.
But how exactly can investor make money off of these changes? “With care,” says Gross. Don’t seek absolute values, warns Gross, but relative ones. The European Central Bank’s intention to ramp up purchases in May and June are a good indication that an unattractive sovereign like Germany will become even more unattractive. Picking investments means holding the least overvalued asset and selling the most overvalued, says Gross.