Saturday, July 20, 2013

The new normal: Did Bill Gross get it right?

The new normal: Did Bill Gross get it right? - CBS News: " . . . Note that the returns of all five major U.S. asset classes are well above their long-term averages. This still holds true if we consider the losses experienced by all of them in June. If this is the new normal, investors should be thrilled, not worried. Also note that Gross' recommendation to raise more investments outside the U.S. didn't work out well either, as U.S. stocks far outperformed international stocks. His prediction about the status of the dollar as the world's reserve currency hasn't fared any better. While the trade-weighted value of the dollar did fall from 104.2 at the end of May 2009 to 102.8 on June 21, 2013, that's an annualized decline of less than 0.4 percent a year. That's hardly catastrophic and not what you would expect from a currency about to lose its status as the world's reserve currency. Keep this tale in mind the next time you're tempted to alter your plan based on some guru's forecast. In fact, this isn't the first time we've seen a big prediction by Gross come up short. This demonstrates why you shouldn't focus on the latest predictions by well-known gurus. Instead, focus only on the things you can control: the amount of risk you take, the amount of diversification you have, the costs you incur and the tax efficiency of your portfolio." (read more at link above)

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New Normal - Google News