Tags: Gross | Real | Estate | Stocks | Bonds

Gross: Real Estate Could Beat Stocks and Bonds

Wednesday, 28 Apr 2010 02:53 PM

Real estate is nearing a bottom and could eventually be a better bet for investors than stocks or bonds, says Pimco co-CEO Bill Gross.

Both commercial and residential real estate are reaching a bottoming point and possibly even prepared to turn higher, he says.

"Ultimately the riskier assets will be the less the risky assets," Gross says. "I wouldn't suggest moving into those particular sectors at the moment but ultimately risk and reward go together."

However, with stocks likely to return 5 to 6 percent and bonds 3 to 4 percent, Gross notes, investors would be wise to start looking at real estate opportunities, especially in light of lower debt and lending rates.

While commercial real estate has its problems, the sector isn’t headed for a crash, says property icon Donald Trump. “Commercial real estate will be severe, but nothing like the housing (crisis) that almost imploded our whole economy,” he told CNNMoney.com.

And the Federal Reserve Bank’s “termination” of a mortgage purchasing program won't be detrimental to the nascent economic recovery in the U.S., writes business pundit Brian Wesbury.

“With evidence of a self-sustaining economic recovery now hard to deny, many pundits are finding new reasons to be bearish. The most recent is that the Federal Reserve has officially ended its massive — $1.25 trillion — mortgage purchasing program,” writes Wesbury in his column in Forbes Magazine, along with his writing partner, Robert Stein.

But not everyone agrees.

Stocks may soon suffer a plunge, because the economic rebound stems from massive government stimulus that is unsustainable, says Kirby Daley, strategist at Newedge Group.

"Right now we're enjoying the confluence of the implementation of massive stimulus, massive monetary stimulus as well as fiscal, around the world," he says.

"I don't believe we have 30 percent upside from here, I certainly believe we are at risk of 30 to 40 percent downside."

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Real estate is nearing a bottom and could eventually be a better bet for investors than stocks or bonds, says Pimco co-CEO Bill Gross. Both commercial and residential real estate are reaching a bottoming point and possibly even prepared to turn higher, he says. ...
Gross,Real,Estate,Stocks,Bonds
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2010-53-28
Wednesday, 28 Apr 2010 02:53 PM
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