Talk Your Book: 3 Reasons to Buy Bonds

Animal Spirits Podcast

The Compound

News, Business News, Business, Investing

4.8 • 2K Ratings

🗓️ 20 January 2025

⏱️ 32 minutes

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Summary

On this episode of Animal Spirits: Talk Your Book, Michael Batnick and Ben Carlson are joined by Dave Braun, Managing Director and Generalist Portfolio Manager at PIMCO to discuss why rates have been moving higher, if the Fed will get us a soft landing, why mortgage bonds look attractive right now, the resiliency of the US consumer, and much more! Find complete show notes on our blogs... Ben Carlson’s A Wealth of Common Sense Michael Batnick’s The Irrelevant Investor Feel free to shoot us an email at [email protected] with any feedback, questions, recommendations, or ideas for future topics of conversation. Check out the latest in financial blogger fashion at The Compound shop: https://www.idontshop.com Past performance is not indicative of future results. The material discussed has been provided for informational purposes only and is not intended as legal or investment advice or a recommendation of any particular security or strategy. The investment strategy and themes discussed herein may be unsuitable for investors depending on their specific investment objectives and financial situation. Information obtained from third-party sources is believed to be reliable though its accuracy is not guaranteed. Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. The Compound Media, Incorporated, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here https://ritholtzwealth.com/advertising-disclaimers. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: https://ritholtzwealth.com/podcast-youtube-disclosures/ Investors should consider the investment objectives, risks, charges and expenses of the funds carefully before investing. This and other information are contained in the Fund’s prospectus and summary prospectus, which may be obtained by visiting pimco.com. Please read the prospectus and summary prospectus carefully before you invest. All investments contain risk and may lose value. PIMCO Investments LLC, distributor, is a company of PIMCO. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Today's Animal Spirits Talk Your Book is brought to you by Pimco. Check out Pimco.com,
0:04.5	learn more with their flagship product. Pimco, active bond ETF. Might have heard of it. Ticker B-O-N-D.
0:09.9	I mean, one of the better ETF tickers there is probably? The name's Bond.
0:14.4	It's very good. Pimco.com to learn more.
0:20.0	Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik
0:25.0	and Ben Carlson as they talk about what they're reading, writing, and watching. All opinions
0:29.8	expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of
0:34.2	Ridholt's wealth management. This podcast is for informational purposes only and should
0:38.4	not be relied upon for any investment decisions. Clients of Ridholt's wealth management may maintain
0:43.4	positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and
0:51.6	Ben. Michael, one of the big misnomer's, I think, for a lot of civilians when it comes to investing
0:57.2	is they think if you're going to invest in fixed income, you have to be able to figure out
1:01.0	where interest rates are going, right?
1:02.4	You have to guess what growth is going to be, which direction interest rates are going to go,
1:06.9	and then you make your bet.
1:07.8	I bet interest rates are going to fall, so I'm going to buy this. Interest rates are going to rise. I'm going to stay away from this. And really, the way, I think the right way to think about it is thinking through the risk reward framework and the setup for where am I being paid to take risk.
1:20.5	And so on today's show, we talked to Dave Brown, who is a managing director and general as portfolio manager at Pimco. And he said, listen, the way that we think about the setup of all the different types of bonds we can invest in is what's the better risk reward framework. It's not like we're buying and selling because we think this thing is going to go to zero and this thing is going to go straight up. It's more like this. We're getting paid to take more risk here than we are to take here. And I think that's the right way to think about investing in fixed income. I agree. And where do I go from here? I don't know.
1:49.0	I'm not sure where to go with that, Ben. That was just so well said. I have nothing to add.
1:52.2	It is interesting, though. Like we went from the worst fixed income market for, I don't know,
1:56.7	10, 12, 15 years. It was just awful. No yield. People were reaching everywhere. Then yields went up
2:03.5	forever. And now that we've lived through that, the way, wait, hold on. Just think about how bad it was.
2:07.8	So no yields forever. And then rising yields caused the stock market to crash. And then of course,
	...

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