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On Thursday, after the release of some worrying US economic data, US government bonds and stocks plummeted. Bill Gross put forward some suggestions to investors: "Stick to value stocks and avoid technology stocks for the time being."
The former king of bonds wrote on the social media platform X that if investors have to get involved in technology companies, they should buy shares of Microsoft Corp. He also quoted Don McLean's 1971 hit song American Pie.
These recommendations come at a time when technology stocks in the S&P 500 Index are experiencing the worst month since September last year, with a decline of more than 6.5% in April, dragging down major stock indexes. In contrast, Vanguard Value ETF, including Berkshire Hathaway Inc. and General Motors Co., fell by about 3.5% over the same period.
In this article beginning with "the day the music disappeared", Gross said that the yield of the benchmark 10-year US treasury bond was "moving towards 4.75%", not far from the peak of 4.74%, the highest level of this year hit on Thursday.
"Why hold bonds?" the post wrote, pointing out that the yield of US treasury bonds is 5.25%. Gross is the pacific ocean Co founder and former chief investment officer of an investment management company.
Gross said that one of his favorite transactions, pipeline master limited partnerships, was strong, but investors should not "over increase their holdings".
MLP is traded on exchanges, focusing on natural resources such as oil and gas, and providing higher yields and tax advantages. The investor said that he owned Western Midstream Partners LP and MPLX LP, and emphasized the high dividends of these two companies.
The Standard&Poor's 500 index fell 1.6% on Thursday, after a report showed that the economic growth of the United States slowed down last quarter, the inflation rate rose, and the performance of Meta platform companies was poor. Traders also lowered their expectations on the timing of the Federal Reserve's interest rate cut, which has now fully absorbed the expectation of the Federal Reserve's first interest rate cut in December.
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