Sell now and have an early Christmas

Bill Gross isn’t buying the Trump rally and the prospects for growth driving it.

As President-elect Donald Trump’s economic team takes shape, led by Treasury Secretary nominee Steven Mnuchin, investors are misguided in betting that promised tax cuts, infrastructure spending and deregulation will spur faster growth, according to an e-mail Thursday from Gross, the billionaire bond fund manager. He said the benefits from such fiscal stimulus likely would be temporary.

Gross said future growth is primarily a function of productivity, which has flat lined for the last several years and shows little promise of accelerating.

“A strong dollar and continuing structural headwinds including aging demographics, de-globalization trade policies, and accelerating debt-to-GDP in almost all countries at now higher interest rates, promise to contain productivity at perhaps 1 percent annual growth rates and therefore real GDP growth at 2 percent,” he wrote.

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I agree.

Even worse for Malaysia, foreign investors are holding a large amount of bonds and they had been heading out of the door in the last couple of months in anticipation of Federal Reserve raising the rates. It is now an almost certainty in December even though Janet Yellen tried to moderate the concerns in her testimony last month.

In the UMNO general assembly last couple of days, I do not read anything that indicates any optimism for the economy. Even if Najib has any more stimulus package, the global headwind is not very accommodating.

I will not keep Ringgit as well, maybe not even Singapore Dollars. So, in general, I'm in favor of taking profit and going long on USD.