Tuesday, July 31, 2012

Bill Gross' Call....Bullish For Stocks?

Today's post will be short and I thank CNBC's "Halftime Report" for providing the topic.  Everyone is in a frenzy about the "Bond King" Bill Gross' negative outlook for stocks going forward.  While I repsect Gross' ability to navigate the credit and fixed income markets (I respect him so much he has my money and is used in my AFL models), please let's remember his area of expertise.

The last time Gross made a bold call on equities was towards the end of the first quarter of 2003.  At that time Gross decalred that the DJIA was headed to 5000, and not a rebound.  He made his case on CNBC and sounded very convincing.  On March 11, 2003 the markets replied and from that point both the DJIA and the S&P 500 rose to all-time highs over the next four years.

I live by a simple philosophy.  That philosophy is "know your business".  From time to time, everyone, including myself forget what we know and what we are good at doing.  Mr. Gross briefly forgot this back in 2003, and may have just forgot it again on July 31, 2012.

Thanks you and good luck everyone!

Jon R. Orcutt, founder of Allocation For Life, is an asset allocation strategist and author of “Master the Markets with Mutual Funds: A Common Sense Guide To Investing Success”