Pimco's Bill Gross Is Wrong About Stocks

Gross says that stocks "stink." But over the long-term, they'll prove to be the best investment.

Bill Gross, manager of the world’s largest mutual fund, touched off a heated reaction recently when he wrote that “the cult of equity is dying.” Most of the responses to his essay seemed to focus on his extremely negative view of the stock market. That was nothing new for Gross, whose enormously successful firm, Pimco, specializes in bonds. In a September 2002 newsletter piece titled “Dow 5,000,” Gross wrote, “My message is as follows: Stocks stink and will continue to do so, until they’re priced appropriately, probably somewhere around Dow 5,000, S&P 650, or Nasdaq God knows where.”

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James K. Glassman
Contributing Columnist, Kiplinger's Personal Finance
James K. Glassman is a visiting fellow at the American Enterprise Institute. His most recent book is Safety Net: The Strategy for De-Risking Your Investments in a Time of Turbulence.