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A prominent financial manager is suggesting that stock prices have yet to hit bottom, even though he's more optimistic about the market's longer-term potential.
According to Bill Gross of PIMCO, stocks are a good investment in the long term - "but only if purchased at the right price." He points out that stock gauges like the "Q" Ratio and average P/E figures are currently comparable to historical low points.
However, Gross resists saying that stocks are currently undervalued. Instead, he cites various changes in the markets whose impact will likely be felt for the very long term.
"We will not go back to what we have known and gotten used to," writes Gross.
The PIMCO manager says that investors are now heading towards a world "where the government fist is being substituted for the invisible hand" and where "regulation trumps Wild West capitalism."
He predicts that corporate profits will be impacted by what he expects to be more taxes in the coming years, and also warns investors "not to bank on the free trade mentality of recent years" to bring back previous global trade growth rates.
Gross is also pessimistic about the future of innovation, profit growth and productivity based on his concern about higher taxes and more regulation in the coming years.
Financial manager has mixed outlook on stock prospects
A prominent financial manager is suggesting that stock prices have yet to hit bottom, even though he's more optimistic about the market's longer-term potential. According to Bill Gross of PIMCO, stocks are a good investment in the long term - "but only if purchased at the right price." He points out that stock gauges like the "Q" Ratio and average P/E figures are currently comparable to historical low points.
However, Gross resists saying that stocks are currently undervalued. Instead, he cites various changes in the markets whose impact will likely be felt for the very long term.
"We will not go back to what we have known and gotten used to," writes Gross.
The PIMCO manager says that investors are now heading towards a world "where the government fist is being substituted for the invisible hand" and where "regulation trumps Wild West capitalism."
He predicts that corporate profits will be impacted by what he expects to be more taxes in the coming years, and also warns investors "not to bank on the free trade mentality of recent years" to bring back previous global trade growth rates.
Gross is also pessimistic about the future of innovation, profit growth and productivity based on his concern about higher taxes and more regulation in the coming years.
