PIMCO's Bill Gross: Real Estate Could Beat Stocks, Bonds

PIMCO's Bill Gross says both residential and commercial real estate markets are reaching a bottom, and may be a better bet than stocks and bonds.

He is the one (I think) who started the "new normal" concept to describe the new, post-crisis economic and financial reality of low growth and low return. He was also the first one to call on the federal government to support mortgage-backed securities issued by Fannie Mae and Freddie Mac. The government did, to whom Mr. Gross sold his vast holdings that he had amassed. I believe he did the same with his Treasury securities holding.

(His monthly Investment Outlook on PIMCO's site is well worth reading, by the way. On this blog I have a link to PIMCO's market commentary page under "Market / Economic News, Analysis, Commentary" section - scroll down the left column.)

When he says something, I listen, as he always seems to be one step ahead of everyone else when it comes to investment.

Real Estate Could Beat Stocks, Bonds: Gross (4/15/2010 CNBC)

"Real estate is nearing a bottom and eventually could be a better bet for investors than stocks or bonds, Pimco's Bill Gross told CNBC.

"Both commercial and residential real estate are reaching a bottoming point and possibly even prepared to turn higher, said Gross, CIO of Pacific Investment Management Co., or PIMCO, the world's largest bond fund.

"With stocks likely to return 5 to 6 percent and bonds 3 to 4 percent, he said, investors would be wise to start looking at real estate opportunities.

""Ultimately the riskier assets will be the less the risky assets," he said. "I wouldn't suggest moving into those particular sectors at the moment but ultimately risk and reward go together."

"Lower debt and better lending rates will make real estate attractive, he added." [The article continues.]

However, when he says publicly that the real estate market is poised for better return, he has probably invested in real estate at a very attractive price and he is quite ready to sell it to you.

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