Bill Gross Cautions Against Trying to ‘Catch a Falling Knife’ Amid Global Market Downturn

Renowned bond investor Bill Gross has urged investors to avoid jumping into the current market downturn in an attempt to find “bargains.”

Speaking to CNBC and sharing his insights on social media, the Pimco cofounder and “Bond King” warned that the ongoing market selloff, sparked by President Donald Trump’s tariff escalation, presents considerable risk for those looking to buy the dip.

Gross emphasized that while there may be opportunities to invest in the future, attempting to time the market amid such volatility is unwise.

“I think there will be time to buy many of these bargains over the next few days, weeks, or months,” Gross said.

He added that investors should stay calm.

He pointed out that the tariff situation is likely to persist as long as the US maintains its current stance, making it difficult to predict an immediate market bottom.

The market turmoil began Wednesday, when President Trump’s announcement of a hard tariff increase sparked a global selloff that reverberated through Asia, Europe, and the US The S&P 500 dropped 5%, marking its worst day since March 2020, while the Nasdaq fell by 6%. In response to the escalating risk, analysts at JPMorgan raised the probability of a global recession to 60%, up from 40% just days earlier.

Gross, known for his expertise in bond markets, cautioned investors against trying to capitalize on the market drop by purchasing stocks too soon. “Investors should not try to ‘catch a falling knife,'” he stated on social media, noting that today’s “bargains” are likely to remain available for some time. He advised a cautious approach given the volatility and the broader global economic uncertainties.

Despite his caution about the market in general, Gross did mention a few sectors where he sees potential value, including domestic stocks with stable dividends such as AT&T, Verizon, and Altria. However, he added that even these stocks are approaching “overbought” territory, meaning they may not offer much room for growth in the near future. On the day of his comments, all three stocks rose, despite the broader market suffering significant losses.

Gross also highlighted the importance of cash during such turbulent times, suggesting that investors follow the lead of Berkshire Hathaway’s Warren Buffett, who has been holding a substantial cash reserve while scaling back his equity holdings. A recent survey by Bank of America found that 55% of fund advisers view a recession triggered by the trade war as the biggest risk in the market, with many forecasting sluggish growth and rising inflation.

While Gross acknowledged that there might be an eventual resolution to the trade conflict, he believes it is unlikely that President Trump will ease off his tariff strategy in the short term. In the meantime, he emphasized that holding cash remains a prudent strategy.

This latest market downturn, according to Gross, mirrors past economic and market events such as the end of the gold standard in 1971, suggesting that the consequences of these developments could be long-lasting. He recommended a patient, measured approach to investing during this uncertain period, stressing that quick decisions in such a volatile environment are rarely beneficial.

With input from Fortune and Market Watch.