Bill Gross thinks 5% returns will be high very soon

Read here:

Most investors for the next several years will be lucky to get a 5 percent return in their portfolios thanks to the growth-constricting debt problems in the U.S. and Europe, Pimco’s Bill Gross said.

Europe’s “dysfunctional family” of disparate nations will make a long-term debt solution elusive and cause the crisis to spread to other countries, said Gross, who as co-CEO at Pimco helps run the world’s largest bond fund.

In his monthly commentary, Gross paints a grim picture of Europe’s future and advises investors to avoid the region and focus on other parts of the world such as Brazil and Asia.

“Investors should recognize that Euroland’s problems are global and secular in nature, reflecting worldwide delevering and growth dynamics that began in 2008,” he wrote. “It will be years before Euroland, the United States, Japan and developed nations in total can constructively escape from their straightjacket of high debt and low growth.”

Until then, he said, investors should get used to low rates, slow growth and weak returns from their portfolios.