- If you are a child of the bull market its time to grow up and become a chastened adult.
- its time to recognize that things has changed and that they will continue to change for the next 10 years and even the next 20 years.
- We are heading into what we call the new normal, which is a period of time in which economies grow very slowly as opposed to growing like weeds, the way children do; in which profits are relatively static; in which the government plays a significant role in terms of deficits and reregulation as they do in Japan.
DDR = Deleveraging, Deglobalization & Reregulation
As of now, PIMCO observes that the highest probabilities favor the following strategic conclusions:
- Global policy rates will remain low for extended periods of time.
- The extent and duration of quantitative easing, term financing and fiscal stimulation efforts are keys to future investment returns across a multitude of asset categories, both domestically and globally.
- Investors should continue to anticipate and, if necessary, shake hands with government policies, utilizing leverage and/or guarantees to their benefit.
- Asia and Asian-connected economies (Australia, Brazil) will dominate future global growth.
- The dollar is vulnerable on a long-term basis.
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