Talk Your Book: 3 Reasons to Buy Bonds

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Jan 20, 2025

Dave Braun, a Managing Director at PIMCO, dives into the complexities of the bond market and why rates are rising. He discusses the intriguing potential of mortgage bonds in the current economic climate. The conversation shifts to the resilience of consumers, navigating credit market dynamics post-COVID, and the evolving landscape of commercial real estate. Braun emphasizes active management strategies and the shift toward private credit amidst changing yield conditions, providing insightful perspectives for investors.

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INSIGHT

Fixed Income Investing

Investors often mistakenly believe they must predict interest rate movements to invest in bonds.
Focus on risk-reward and identify where you are being paid to take risk.

INSIGHT

Bond Market Shift

The bond market has transitioned from a period of low yields and rising rates to a more favorable environment.
Investors now have a margin of safety with 4-6% yields.

INSIGHT

Bond Yield Dynamics

The recent rise in bond yields is due to several factors, including market anticipation of Fed cuts and the "Trump trade".
Current bond yields offer real yields not seen in decades, presenting an attractive investment opportunity.

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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

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