Mastering Stocks & Bonds: Understanding How Asset Cross-Over Strategies Will Improve Your Portfolio’s Performance

Recording (Members-Only)

A CFALA Book Club Sponsored Event

Sandwiches, salad, and dessert will be catered by Mendocino Farms. 

Ben Emons, Senior VP and Portfolio Manager, PIMCO | Ben Emons is a senior vice president and a portfolio manager in the global portfolio management group at Pacific Investment Management Company (PIMCO), Newport Beach, California. Prior to joining PIMCO in 2008, he was a portfolio manager at Nuveen Investments in Los Angeles, focusing on government bonds and derivatives.

He has 18 years of investment experience and holds an MBA from the University of Southern California Marshall School of Business and a master's degree in international finance from the University of Amsterdam.

Mastering Stocks and Bonds is author Ben Emons’ latest book released on October 6th, 2015. Mr. Emons also authored “The End of The Risk Free Rate” and “The Financial Domino Effect” and favored the CFA LA Society with lunch presentations and evening Book Club discussion events for both.

Imagine you had a choice between only two investments; stocks and bonds. What would be your choice?

The question should be answered by not only the weights of each in the portfolio and by their risk characteristics. The answer should also focus on 'crossover return' between the two asset classes. What investors may yet have to appreciate and understand is how much bonds may experience in certain times returns that have equity characteristics, as well as how much stock returns during certain times could be closely correlated with bond returns. Understanding how future returns can be expected from bonds and stocks may significantly be influenced by what author Ben Emons calls the 'crossover return.'

Investing in stocks and bonds goes with a certain style and an investment horizon. A successful mix in a portfolio should be supported by a 'crossover strategy' that is focused on increasing returns by investing in companies at numerous stages of the business life cycle. The strategy is the direct opposite of the buy and hold method, where the investor does not trade between the period when a security is first bought and when it's finally sold. The crossover strategy's goal is to get the best returns during shorter term periods (3 months up to a year).

This book addresses the methods of picking in bonds and applies those methods in picking stocks, focusing on how to use bond strategies to enhance stock picking strategies. The same analysis is applied to equity strategy to identify value in individual bonds. Every investor makes her or his own judgment for why a stock or a bond has value or why it does not. Here, Emons helps investors understand different selection methods by analyzing and presenting practical cases of individual selection.

Along the way, readers will learn about equity and fixed income trends, get practical tips, and gain a solid education on stocks, bonds, and convertible bonds. Looking at stocks through the lens of a bond buyer, and vice versa, has the power to improve your portfolio's overall returns and reduce risk.