PIMCO Reduces U.S. Exposure Amid Rich Valuations, Removal of Accommodation

Jon Fiscal Policies

Long a member of the bullish camp, PIMCO’s outlook recently shifted and they are now warning of stretched valuations and downside risks.
As they write in Preparing for Pivot Points, “Investors have enjoyed economic stability and positive market returns for years, but stretched valuations and a changing macroeconomic backdrop suggest a change is coming.”
Anmol Sinha, a vice president and strategist at PIMCO, recently spoke with FS Insider about their new stance and how they are currently invested.
Generally growth has been fairly stable recently, Sinha said on FS Insider, but it’s been supported by monetary policy, which is beginning to reach the limit of effectiveness. That backdrop coupled with low global growth generally means there’s little room for error, he added.

This post was published at FinancialSense on 08/22/2017.