You sit back and listen to the interest compound. But he and other bond experts see big gains to be made. Interest rates on new bonds will fall, they predict, pushing up the price of existing bonds. That's partly because of low inflation. If he's right, long-term bonds would rise about 20 percent in value.
Some notable experts disagree, however.
Stephen Roach of Morgan Stanley, for example, sees long-term rates climbing until they top 7 percent. Gross and Fuss see continued low inflation for the US and a favorable supply-demand picture for bonds. In the US and Canada, government budget deficits have been reduced sharply, reducing their borrowing needs. On the demand side, Gross notes, both institutional and individual investors are shifting into bonds.