The Markets. They Be Bubbly.

I love Bill Gross. I really do. In some ways, he reminds me of a slightly more outspoken, more-in-the-news Warren Buffet. He has the same folksy, let-me-break-it-down-for-you-through-an-adorable-metaphor-story-ism, he has the same look of someone's highly intelligent, very sharp grandfather. He inherently exudes a sort of presence that clearly says, "Don't mess with me. I've done this since before there was a stock market. I know all there is to know". Whether or not that last one is actually true is a different story, but the comment still stands.

He has been taking to the airwaves recently, calling the markets bubbly, claiming that the easy money policies have created artificially priced assets. He claims that, eventually, investors will realize that they are taking far too much risk for far too little reward, and then (I think this is his implication) will vacate those types of assets for something more stable, say, a fixed income vehicle of some sort. Who doesn't love a good solid bond?

Maybe it's because he's currently looking at his 7th month of negative cash flow from his fund at PIMCO, (totaling approximately $3.7B in cashouts, this would keep the fund on pace to be its biggest ever yearly outflow) that has got him in a tizzy. Whereas Gross' fund has given investors a loss of 1.72% this year, U.S. stocks have rallied 20% this year. (However, in all fairness, I need to note that in the past three months the fund has outperformed 93% of its peers and provided a 2.44% return.)It makes me a little sad to see PIMCO struggle like this, being from my hometown and the employer of many of my friends, but, as everyone says, we're at a turning point. The market is beginning to pivot, and any person in their right mind would never put their money in fixed income when (taking on more risk) they could see a great return as the market recovers. I, for one, have never really liked investing during the winter season as I think that there's too many variables to be able to accurately guess (because that's what all investors are essentially doing, no matter what they say) how the market will react to things-- especially when news outlets are releasing data about sales, profits and volume spent seemingly every 30 seconds. So I'll sit on it for a month before I make any decisions, but maybe I'll put a little more into my PIMCO Total Returns. Just to help 'em out.