By Daily Crux Editor Sean Goldsmith:

Bond King Bill Gross says high-quality corporate bonds are the place to be.

In his August investment outlook, the manager of the world's largest bond fund said investors should favor debt and stocks of "strong" companies and emerging markets where growth prospects are "tilted upward."

Investors in risky assets will get "haircuts," because economic growth will only be 3% compared to the 5% to 7% average for the past 15 years...

"There is no investment potion for this new environment other than steady income-producing bond and equity investments in companies with strong balance sheets and high dividend yields," Gross wrote. "A journey to 3 percent nominal GDP means default/haircuts for assets on the upper end of the risk spectrum, as well as extremely low yielding returns for government and government-guaranteed assets at the bottom end."

Gross also stressed the importance of "tangible earnings growth," saying stocks will be valued on increased dividends, not "green shoots hope."

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