The bond king now likes stocks.
Bill Gross, co-CIO at Pimco where he helps manage the world's largest bond fund, said in an interview with CNBC that all things considered, he prefers stocks over bonds in the current investing climate.
"Let's suggest the economy looks good, that risk assets— whether it's high-yield bonds or whether it's stocks—have a decent return relative to the potential of declining bond prices," he said in an interview. "I'll go with the stock market."
Several factors will make things difficult for the bond markets ahead, not the least of which is the recently passed health care law.
Prospects that the health care plan could add to the US deficit would make the nation's debt less attractive to investors because of an increase in supply and less fiscal stability.
While sovereign issuance in countries with stronger economies and lower debt—Gross mentioned Germany and Canada specifically—look better, other countries such as the US and United Kingdom don't offer the same promise.
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