A diverse set of economic circumstances around the globe are forcing investors to take an equally diverse approach to investing, Pimco's Mohamed El-Erian said.
"Bimodal" conditions mean that those employing the simple "risk-on" or "risk-off" approaches are missing both opportunities and dangers, El-Erian said during an interview on CNBC's "Squawk Box."
"We are on this bumpy journey to this unusual destination, which is three to five years" long, said El-Erian, co-chief investment officer at Pimco, which runs the largest bond fund in the world. "The length depends on policymakers, and policymakers have been postponing the deleveraging, which makes this journey even more uncertain."
In Europe, for instance, unpopular austerity measures— combined with "structural reforms that promote growth" — are necessary in Greece but not in Germany, he said.
"There's very different narratives in Europe and people are trying to simplify too much," El-Erian said. "In Europe, the U.S., this is a day and time to be very differentiated. Don't go for the simple headliners, because they will mislead you."
Since the onset of the European sovereign debt crisis , policymakers have debated whether to use austerity to clean up the fiscal mess that has caused government bond yields to surge, or to continue to spend in hopes of promoting economic growth.
The Dutch governmentfell this week after citizens there rebelled against austerity, indicating that even so-called core euro zone nations are not immune from the debt crisis.
"Today, Germany is a good house in a challenged neighborhood," El-Erian said. "Over the next few months something is going to have to change. Either the neighborhood is going to have to get better or the house is going to come under some pressure."
Stressing that "unfortunately, the easy gains are behind us," he said investors will have to look for companies with strong margins, low debt and ability to grow.
"That's what the results are telling you," El-Erian said. "That's what Apple is telling you, that's what Danone is telling you. It's important to be differentiated today."