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Investors Searching for Safety in this Market?

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  • Description

    PIMCO Executive V.P. Tony Crescenzi on investors’ shift to the safety of bonds.

  • Duration 2:51
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Let's take a look at where investors have been putting their money in this very -- of climate in the latest week.

You all just are so scared you're going into bond funds seven point 61 billion dollars one -- -- bond funds.

While three point 92 billion dollars went into money market funds.

3.2 three billion dollars came out of equity funds so does this mean investors.

Are still looking for safety and should they be and in what form would bring back.

Pimco is Tony -- and -- and who who tweets under at bond -- tell them.

It's we'll start to talk a -- between on that can government do most of causes and yeah bill Bill Gross and -- -- -- but okay first off this is surprising to see those numbers.

No -- in fact this is the trend for more than a decade remember there was a financial bubble in 2000 that scared people out of the stock market at that point in time.

Households represent about half of the stock market's capitalization and -- it sunk into the mid thirties has basically stayed there people.

Also remember the population's been -- -- demographically -- question was the first year that baby boomers those bond between 46 and 64 begin turning 65.

And they've experienced in these two shocks and a decade just don't want his -- assets at a volatile.

We're not fighting the tape we're looking at the fact that people want to go into treasuries so.

I'm playing this game that I named pick -- maturity any maturity if people have to be in US treasuries which part of the yield curve do you want -- don't want.

The long -- -- what the Fed is doing is -- -- -- -- you'll create inflation objective is to create inflation that's bad for the long -- -- -- prices could -- the short -- this -- to to -- but there -- short rates anchored by Federal Reserve policy the sweet spot is the seven year -- seven -- wrong reason why and that's the best performing sector in the treasuries this year is is because of something -- rolled down a seven year -- year will be -- six -- it will roll down yield curve.

That's distance in yield between seven -- in the six years the most of any point on the -- yield curve.

And so -- -- is something special about it.

The price therefore will grow up as the yield goes down to meet -- at a six year as it rolls down the curve and you -- percentage point in total return.

Just some holding -- because -- vols down the apparent price.

MySpace and either by the seven near their all kinds of vehicles including a Pimco vehicle that enables you to do is we show that to the tickers analysts episode frank -- YC but.

But they're all all kinds of opportunities money markets mean that the SEC have to postpone or at least put off any kind of boat.

On not making regulations more strict to make sure -- safe but they don't so called break.

The -- made them safer and not long ago in fact -- shorten the maturities increasing manna from the cool liquid assets seven necessary.

Think about this so a year ago I'm most about half of prime money funds others -- -- invest outside of just -- securities.

Here for the money to invest in European banks now it's just 10% so that much safer than they wore a -- afraid of Europe.

Good to see our -- back in just a minute with a much -- --

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