The Dow Jones Industrials (DJINDICES:^DJI) have gotten out to a terrible start in 2014, dealing investors a tough blow after five straight years of solid gains. But bond legend Bill Gross believes that investors still need to be cautious even after recent declines, pointing to changing macroeconomic conditions as potentially putting more pressure on risky assets like stocks.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, goes through Gross's argument, in which he explains that slowing credit expansion could hit asset prices. Basically, Gross believes that falling government deficits and slowing quantitative easing will halt the growth of credit in the economy, and historically, that has led to pressure on risk assets. By contrast, Gross believes that the high-quality bonds in his PIMCO Total Return ETF (NYSEMKT:BOND) could outperform in such an environment, and Dan adds that other non-PIMCO ETFs like the iShares 20+ Year Treasury ETF (NASDAQ:TLT) could also do well. Dan concludes that you have to take Gross's advice with a grain of salt given PIMCO's bond emphasis, but it's still worth being careful with your investments.