Echoing Bill Gross' recent urging that investors "move to cash" and Jeff Gundlach's "there's going to be a buyer's remorse period", amid this glorious Trumpian utopia, Gross' former colleague Mohamed El-Erian agrees that now’s a good time to take advantage of the latest rallies in global financial markets and scale back from risk.
“It makes total sense to take some money off the table,” El-Erian, the chief economic adviser at Allianz SE and a Bloomberg View columnist, said Tuesday.
“We’ve priced in no policy mistakes. We’ve priced in no market accidents, and we’ve ignored all sorts of political issues," noting that he held about 30 percent of his own money in cash.
Furthermore, Bloomberg reports that Pimco has been trimming its holdings of high-yield bonds, said Mark Kiesel, chief investment officer for global credit at the company. Pimco, based in Newport Beach, California, is owned by Munich-based Allianz.
“We have actually been de-risking,” Kiesel said Tuesday on Bloomberg TV.
“We actually like holding, in the credit markets, a little more cash.”
Goldman Sachs' analysts are among those suggesting caution about stocks at this point. Any large fiscal stimulus risks stoking inflation more than growth, and in turn boosting interest rates that then hurt shares, according to their rationale. The move would be a risk to “the equity market party,” Goldman analysts wrote in a report.
