Boston, MA 05\/15\/2013 (wallstreetpr) \u2013 <\/b>The Chief Executive Officer of Pacific Investment Management Co. (PIMCO) had ascertained that the world\u2019s biggest fixed income fund would remain focused on less riskier assets. This decision is in line with the CEO Mohamed El-Erian\u2019s forecast of lack luster growth in the global economy \u2013 as he calls it a new normal era.<\/p>\n
Global Economy<\/b><\/p>\n
El \u2013 Erian reports that the global economy is moving towards stable disequilibrium stage where the prices are elevated to higher levels and favorable growth shift is missing. This could end in financial turmoil, huge social tensions and beggar \u2013 thy \u2013 neighbor policies.<\/p>\n
The CEO has warned the investors to be prepared for an effective restructuring of their portfolios to include less risky assets such as corporate and sovereign bonds as the economic growth could be highly disappointing. He forecasts that the US economy growth would be only 2 percent on average and that Japan would struggle to sustain the initial surge in economic activity.<\/p>\n
El \u2013 Erian warns that Europe is facing the threat of zombification where the operations of companies and banks are not contributing much to the economy, despite their continuous operations. further, he projects an annual growth of 6 to 7.5 percent for China.<\/p>\n
Central Banks<\/b><\/p>\n
The CEO of Pacific Investment Management Co. warns that the inflation of global economy would be higher and less stable for the next three to five years. He also warns that central banks are still fighting to remove the sluggish growth in economies with interest rate cuts and asset purchases. He also criticizes the disconnect introduced by central banks between rising market prices and the economic and financial fundamentals.<\/p>\n
Strategy of PIMCO<\/b><\/p>\n
In line with such global developments, the Pacific Investment Management Co. (PIMCO) had decided to reduce the risk posture of its portfolios. The company had advised investors to sell off riskier assets and invest more in government debt including inflation linked securities and nominal Treasuries.<\/p>\n","protected":false},"excerpt":{"rendered":"
Boston, MA 05\/15\/2013 (wallstreetpr) \u2013 The Chief Executive Officer of Pacific Investment Management Co. (PIMCO) had ascertained that the world\u2019s biggest fixed income fund would […]<\/p>\n","protected":false},"author":3,"featured_media":6335,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":{"twitter_2902945987_2902945987":""},"rop_publish_now_history":[],"rop_publish_now_status":"pending","footnotes":""},"categories":[262],"tags":[2101],"stock_ticker":[],"class_list":["post-6333","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-rumors","tag-pimco","entry"],"acf":[],"yoast_head":"\n