In the "new normal" of slower economic growth and lower investment returns, Pacific Investment Management Co. LLC's Bill Gross is himself buying steady, dividend-paying stocks.
In the "new normal" of slower economic growth and lower investment returns, Pacific Investment Management Co. LLC's Bill Gross is himself buying steady, dividend-paying stocks.
"You want to look for stability of income and growth," the company's managing director and chief investment officer said at a meeting of local investors in Costa Mesa, Calif. "That probably doesn't mean bonds."
He said he was personally buying stock in AT&T Inc. and Verizon Communications Inc., for example, both stable companies that pay a 6% dividend.
"You can at least bank that dividend" if markets don't cooperate, he said during the meeting, which was sponsored by Women Investing in Security and Education, an Irvine, Calif.-based investor group.
Mr. Gross also suggested that attendees look at Pimco's closed-end-bond funds, with their 10% yields.
With credit spreads narrowing, Mr. Gross said, all types of bonds have become "Treasury-like.”
“The markets have been ‘derisked,'" he added.
Mr. Gross also revealed that he's unveiling a market commentary that will address California's economic problems. The piece will be entitled "Do-Do Economics," he said.
"It's the first time I've dared to venture into the potential negatives of my home state," he said.
The state's recent budget deal was "just a sham," he said, because much of the savings come at the expense of local governments.
