From The Guru Investor:

Heading into 2012, PIMCO's Bill Gross sees a world of "fatter tails" and "great risk" for global economies and financial markets.

"In the face of a delevering zero-bound interest rate world, investors must lower return expectations," Gross writes in his latest commentary on PIMCO's site. 2%–5% for stocks, bonds, and commodities are expected long-term returns for global financial markets that have been pushed to the zero bound, a world where substantial, real price appreciation is getting close to mathematically improbable.

Adjust your expectations, prepare for bimodal outcomes. It is different this time and will continue to be for a number of years...

Read full article...

More from Bill Gross:

Pimco's Bill Gross is betting BIG on QE3

Bond king Bill Gross: More "QE" could send interest rates soaring

Bill Gross: Four ways the gov't is planning to steal from you now...