From The Guru Investor:
Heading into 2012, PIMCO’s Bill Gross sees a world of “fatter tails” and “great risk” for global economies and financial markets.
“In the face of a delevering zero-bound interest rate world, investors must lower return expectations,” Gross writes in his latest commentary on PIMCO’s site. 2%–5% for stocks, bonds, and commodities are expected long-term returns for global financial markets that have been pushed to the zero bound, a world where substantial, real price appreciation is getting close to mathematically improbable.
Adjust your expectations, prepare for bimodal outcomes. It is different this time and will continue to be for a number of years…
