MW Don't buy the dip, legendary investor Bill Gross warns. He likes three stocks for now.
By Steve Goldstein
Gross invokes the Wall Street adage 'don't buy a falling knife.'
Legendary investor Bill Gross told investors that they shouldn't try to buy the dip after the worst stock-market drop since the pandemic.
"This is an epic economic and market event similar to 1971 and the end of the gold standard except with immediate negative consequences," said Gross in a message on the social-media service X, following a similar message he gave to Bloomberg News.
"Investors should not try to 'catch a falling knife,'" he said, adding that today's bargains will be around tomorrow and the next day.
Gross recommended buying domestic companies such as AT&T $(T)$, Verizon Communications $(VZ)$ and Altria $(MO)$ for their relatively safe dividends in a falling interest-rate environment. "Even with these be careful - they are approaching 'overbought' territory," he said.
All three of the stocks Gross mentioned advanced on Thursday, even as the broader Dow Jones Industrial Average DJIA tumbled 1,679 points after President Donald Trump unveiled tariff increases that went beyond the Smoot-Hawley levies of the 1930 that many believe exacerbated the Great Depression.
AT&T has a relative strength index reading of 68.82, while Verizon's is 62.44 and Altria's is 52.86. RSI is considered overbought when it's above 70.
By comparison, the S&P 500's SPX RSI is 31.92 - readings below 30 are considered oversold.
Gross rose to prominence as the co-founder of Pacific Investment Management, where he earned the moniker "the bond king." Gross made his fortune by aggressively trading bonds at a time when other investors including insurers and pension funds were less active.
-Steve Goldstein
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April 04, 2025 03:51 ET (07:51 GMT)
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