Bill Gross Quotes

When bond prices fall, interest rates soar, with painful consequences for all borrowers.

One day we will have more inflation, and our bonds will bleed like a pig. The only reason for buying long bonds is short-term or as a desperate haven for terrorized investors. But the potential to make longer-term real money is naught.

The big question is: When will the term structure of interest rates change? That's the question to be worried about.

If you are prepared for some risk, junk bonds pay about 5%, but they tend to get whacked when interest rates rise. Same with lower-yielding but higher-quality corporate bonds.

It is very difficult to predict when a bond crisis could happen.

One component of the leading economic indicators is the yield curve. Bond investors keep a close eye on this, as it illustrates the spread or difference between long-term interest rates and short-term ones.

The investor should be aware that even though safety of its principal and interest may be unquestioned, a long term bond could vary widely in market price in response to changes in interest rates.

You would expect to see that first in high-yield [debt], but it was in the most liquid thing in the world. So that, I think - it's a little bit of a warning that we've got to be prepared and just be careful.

To be sure, the provision of liquidity alone can by no means solve the problems of credit risk and credit losses; but it can reduce liquidity premiums, help restore the confidence of investors, and thus promote stability.

Lower interest rates are usually considered good for stocks because they lower the cost of borrowing and make bonds a less attractive alternative investment.

Gentlemen prefer bonds.

For investors who do want to speculate in high-yield bonds, one alternative may be a junk bond mutual fund, which can offer investors the relative safety of diversification.

Right now the long-term investors are telling us that they're not as concerned about inflation and so we're seeing these rates now move into the marketplace and out to the street - rates that individuals can get.

If stability and efficiency required that there existed markets that extended infinitely far into the future - and these markets clearly did not exist - what assurance do we have of the stability and efficiency of the capitalist system?

When does money run out of time? The countdown begins when investable assets pose too much risk for too little return; when lenders desert credit markets for other alternatives such as cash or real assets.

The sale of Treasury bonds, notes, and bills finances the U.S. government, and those securities are, in turn, a primary vehicle for savings for a wide range of U.S. households. Treasury securities are also an important source of collateral within the financial system.

Typically in a panic, corporate bonds sell off as investors fear weaker growth, tighter financial conditions, or need liquidity.

Starting in the wake of the 2008 GFC (Global Financial Crisis), market observers have warned of a crash in the bond market. Initially, it was believed that the trillions printed to bail out the banks would cause inflation and, therefore, a flight from bonds.

There is no point in being a bond vigilante if you cannot influence governments and central banks by selling bonds.

Bond investors are the vampires of the investment world. They love decay, recession - anything that leads to low inflation and the protection of the real value of their loans.

See the investment world as an ocean and buy where you get the most value for your money. Right now the value is in non-callable bonds. Most bonds are callable so when they start going up in price, the debtor calls them away from you. But the non-callable bonds, especially those non-callable for 25-30 years, can go way up in price if interest rates go way down.

You will not see, in my career, the kind of returns this industry had in 2005 and 2006 for a very simple reason - the banks were undercapitalized, and returns are a function of earnings and capital.

When yields on corporate bonds are lower than dividends on stocks, that unnerves me.

We need a significant amount of market stability, not for the insurance companies, but to ensure patients can get access to the care they want.

It is indeed true that the stock market can forecast the business cycle.