Safest to Riskiest Investments - as PIMCO looks at it

[Jerry K.]

Found this article by Bill Gross of PIMCO. He shows an image of a series of concentric circles with the safest investments in the center and each circle going outward has more risk - according to the PIMCO investment team.

Look at the outer ring for the most risky investment classes:

Now there is more to their thought process than a simple risk diagram. Reading the article will help explain it.

I found their "Cause" and "Effect" view interesting. In simple terms they say "...the primary “cause” is central bank monetary policy. The “effect” is an expanding or contracting array of asset prices that are dependent upon it. Change the price of credit at the center and you change the price of assets at the outer extremities. Simple really, although the timing and yield of price at the center is no easy matter.."

Makes for an interesting conversation.