Bill Gross, seen here at Morningstar conference in June, delivered his first written commentary for Janus, and joined Janus CEO in a webcast.

Bill Gross on Thursday released his first investment outlook since joining Janus and addressed the elephant in the room right away: Why did he leave PIMCO?

While he admitted he wouldn’t reveal everything, he ultimately revealed little, writing, “slowly and with great hesitation, I came to understand that it was time for me to leave. It happens sometimes to founders!”

Gross called his move to Janus a “return to a simpler role, completely focused on markets, investment performance and serving my clients,” adding, “I am not ready to retire, so here I am.”

As he moved on to his outlook on the markets, Gross compared the markets that aren’t U.S.-bond and equities to the final stages of a “1920s marathon with partners clinging to each other in a desperate attempt to keep from falling down,” as many economies are struggling with the beginning of a recession or facing an impending one.

His advice is to get used to it. “There is a new financial era. Accept it and modify your behavior accordingly, so that your future is safe, secure, and you look forward to a brighter tomorrow,” he wrote.

The problem is financial markets are artificially priced, according to Gross, and now that we’ve had our feast years, we’re due a famine “almost by mathematical necessity.” He predicted bonds could reach 3% or 4%—“at best”—with stocks at 5% or 6%.

In a webcast on Thursday with Dick Weil, CEO of Janus, Gross said monetary authorities have done a “decent job” of keeping interest rates down for a long period of time so that “financial markets didn’t implode” and so stock prices can rise.

Where are interest rates going to go now, though? Gross said in the webcast that a zero percent interest rate “distorts capitalism. It basically recognizes that capitalism can’t exist forever when people can borrow for free.”

He believes the Fed will slowly raise the rate to around 2%, in which case equity prices, cap rates and bond prices will be “decently supported, meaning in plain English there are no significant bear markets.”

The caveat to that is that even if we don’t have a significant bear market, rates will stay low for some time.

In the investment outlook published on Janus’ website, Gross recommended an unconstrained strategy as a method that might serve the broadest population well. His explanation of an unconstrained strategy is to “take your best ideas within the context of a low duration/short maturity portfolio and try to help investors achieve what they consider to be an acceptable return. Watch the fees as well.”

Investors in such a strategy can expect a shorter average maturity for bonds, an ability to profit from currency movements and exposure to structured alpha, he wrote.

The Janus outlook and the webcast can both be viewed here.

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