I held on to PTTRX for 8 years, and made $. Great job/thank you Bill Gross.
I've got about 10% of that amount in PTTRX now.
Why? Because PTTRX is chock full of long term treasuries, like the 10 year. Gross just got done TELLING U that he INCREASED the amount of long term treasuries (to 32% or something like that) because he does not see the Fed tapering until 2016.
Really? They're not going to taper until 2016? Maybe he knows better than the majority of economists. Count 90% of my PTTRX out of that guesswork.
There will be a time to get back in more fully. Good luck.
The fund has run its course, and its the wrong fund for this environment. Interest goes up and prices come down and no matter the time horizon interest is going up. They would have to drastically change their approach to generate a positive return,
We know Bernanke's history. He was desperate to rev up the economy. The Fed lowered the funds rate to an absurd .25%, essentially it's at 0.
But that didn't work. That's why they experimented with QE. They started slow, and kept increasing purchases, to where we are now-$85 billion a month.
Nobody's talking about increasing the funds rate because they're focusing on winding down QE first. Is that what BIll is referring to? Seems he may be more interested in cooling heads and keeping PTTRX holder out of his cookie jar and buying time than telling us what's going on, or he's just plain wrong and focused on the wrong thing (fund rate and not QE tapering).
If you're referring to the federal funds interest rate, why would Bill Gross take comfort in that. It's practically at 0, and it won't go any lower. We get a meager amount of interest from treasuries. The big issue is, what will happen to bond prices once the Fed starts tapering. If the Fed's not buying Bill's bonds, who is.
It makes me wonder, and it's making plenty of other people wonder, who are taking their $ out of his fund.
I don't see the huge difference. The more the Fed tapers, the less control they'll have over a runaway interest rate. You could make the case that Fed buying is independent to the interest rate, that without Fed QE there's deflation and bonds are more valuable, but common sense is the less demand for bonds (the less the Fed is buying), the less they're worth.