Bill Gross: "Risk investing is as big as it was in 2008"

The risks of investing in stocks and bonds are again just as big as before the outbreak of the financial crisis in 2008, according to asset manager Bill Gross. Speaking at an investor rally in New York, he said investors today are paying a fairly high price for stocks and bonds, while the expected returns are getting lower and lower.

The policies of central banks further push up the prices of both stocks and bonds, while at the same time delivering little growth within the real economy and punishing savers. The new money that is pumped into the economy by central banks and that yields less than zero percent returns is looking for a safe haven. That money is not only looking for a way into bonds that yield too low a return, but also into stocks that are now overvalued.

'Taking lower returns into account'

"Instead of buying low and selling high, as an investor you now have to step in high and hope that it ends well. Under these circumstances, you have to tell investors that the world has changed and that they should expect lower returns. That volatility is also low and therefore you don't need much return."

Bill Gross was the face of Pimco for many years, but now works for the Janus Henderson Global Unconstrained Bond Fund. His $2 billion investment portfolio has returned 3.1% since the beginning of the year, outperforming just 22% of the other major mutual funds on Bloomberg's radar.

Diversification in the portfolio

It is telling that even an experienced asset manager like Bill Gross, with decades of experience in the world of investing, struggles to achieve a good return today. This is not only difficult for wealthy individuals, but also for all pension funds and insurers who need a certain return to satisfy the participants.

Especially now that stocks and bonds are so highly valued, it seems Buy gold An attractive alternative. The price of the precious metal is far below its all-time high of 2011, while the money tap of central banks is still wide open. If a new crisis breaks out, the precious metal may be a better safe haven than the bond market. Especially if that crisis is accompanied by a depreciation of the currency.