Time to buy bond funds or keep waiting?

[brewer12345]

How low can rates go?

Ask the Japanese about that.

 

[haha]

What Bill Gross Says

Sounds to me, as I try to parse his turgid prose, that Big Bill is saying- Stay Short.

"We do suggest, however, a strategic boycott of most risk assets based on the reality that an investor is not being paid adequately to hold them, as well as the Greenspan assumption that today’s low risk premiums ultimately lead to future periods that end badly. In turn, we currently suggest a substitution of near cash assets and non-dollar currencies for standard index assets. These out-of-index bets ultimately should produce higher returns with less than expected risk if done in moderate quantities. As with people, bad things can happen to historically good assets if driven to overvaluation. Blindly adhering to an index in order to insure a positive but diminishing relative alpha return is probably not an intelligent response to today’s dilemma. Recognizing and ultimately avoiding the tyranny of an index can in effect produce a higher return with less risk. We hope with your guidance to be able to move in that direction in order to remain the future “Authority on Bonds.”

William H. Gross

http://www.pimco.com/LeftNav/Late+Breaking+Commentary/IO/2006/IO+April+2006.htm

 

[yakers]

I really respect Gross on bonds. But his track record on other asset types is not so impressive. Still like he implies and as I understand Buffett is doing, I have upped my AA % in foreign stocks. Other than that I just DCA into my mostly Lifecycle index funds, I am not worried as I am still in the accumulation phase. And I will be getting a COLAd pension someday.

 

[Gone4Good]

Re: What Bill Gross Says

Recognizing and ultimately avoiding the tyranny of an index can in effect produce a higher return with less risk.

The siren song of market timing beckoning us toward the shoals.