PIMCO founder says bonds are 'investment garbage' just like cash

Ontime bond king Bill Gross is talking trash about the bond market -- literally.

Bill Gross, co-founder and co-chief investment officer of Pacific Investment Management Company (PIMCO), adjusts his sunglasses as he arrives to speak at the Morningstar Investment Conference in Chicago | Photo: Jim Young/Reuters/Ritzau Scanpix

In a meandering and sometimes off-kilter investment outlook posted on his website, onetime bond king Bill Gross said longer-term Treasury yields are so low that the funds that buy them belong in the "investment garbage can."

Ten-year yields are likely to climb to 2 percent over the next 12 months, from about 1.3 percent currently, handing investors a loss of roughly 3 percent, he wrote. Stocks could also fall into the category of "trash" should earnings growth fall short of lofty expectations.

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