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Author: lsmr409 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35387  
Subject: Bill Gross Date: 10/9/2008 5:24 PM
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In Bill Gross' recent Outlook he wrote,

Summary and Investment Conclusions
...The benevolent fist of government will now join hands with Adam Smith in a most visible manner. Because it will, expect a lengthy recession but not depression, accelerating government deficits approaching a trillion dollars as forecast here in this Outlook several months ago, and the eventual rise of inflation and longer dated bond yields. For now however, it is best to focus on the potential unfreezing of commercial paper and a globally coordinated policy rate cut. Own the front ends of Treasury/LIBOR yield curves. Agency mortgage-backed securities will also benefit from Treasury buybacks. Stay liquid, remain in high quality. It is prudent at the moment to fear McFear itself.


I have a few questions...

When he says to 'own the front ends of Treasury/LIBOR yield curves', might that be accomplished by owning a short-term bond ETF like SHV?

When he mentions 'the eventual rise of inflation and longer dated bond yields', would that point toward eventually owning a long-term bond ETF like TLT, as well as something like TIP?

How does an individual invest in 'agency mortgage-backed securities'?

In the advice 'Stay liquid, remain in high quality', what sorts of investments would fit the bill (no pun intended), and what sorts would not?

Thanks so much for any help,

Todd
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