Stock market or bonds

Bill Gross is probably one of the most important fund managers in the world. He is the soul behind PIMCO, the biggest bond fund. Now he is thinking of switching to equities. Why? We believe that we´ll see a serious bubble in the secondary bond market. Governments are going to pay their debts by inflation means, and bonds are going to tumble. Gross will try to anticipate this movement.

As we see in the graph, Eurostoxx against Bund, which is equities against bonds, it seems that we will try to reach the upper band of the chart after a perfectly normal retracement. It could be a good idea to follow Gross´s steps.

7/8/2010