Mastering Stocks and Bonds ― Understanding How Asset Cross-over Strategies Will Improve Your Portfolio's Performance

If you mostly invest in stocks, you probably focus on individual companies by applying a bottoms-up analysis. You look at a company's profitability, dive into financial statements, and educate yourself about its products and services. You may at times look at the broader economy, monetary policy, and perhaps politics—but maybe not. It's a 'micro' approach to investing. Your primary objective is a portfolio with a moderate-to-high risk/return profile.

If, on the other hand, you are a bond-oriented investor, you probably do the opposite. You likely think more like an economist, keeping a close eye on interest rates and perhaps currencies, and you focus predominantly on global macroeconomic developments. You may at times look at the entities issuing the bonds—but probably at just their ratings. You have a 'macro' approach to investing, and your primary objective is probably a conservative portfolio, focused on income, with a low risk/return profile.

Despite popular belief, bond and stock investors are not opposites. After all, both stocks and bonds can be looked at in identical terms: as instruments representing discounted cash flow. Understanding this, astute stock investors can—in these times of volatility and uncertainty—apply bond strategies to safeguard returns. And wily bond investors, facing perennially low yields, can do better using a stock selection strategy designed to improve the portfolio's income distribution. In Mastering Stocks and Bonds, you will learn: 1) Why bond and stock markets—and securities—are more alike than different; 2) How to do equity-style analysis on bonds and a fixed income–style analysis on stocks; 3) How to construct an effective 'commingled' bond and stock portfolio; 4) How a major-league portfolio manager looks at markets and securities

Along the way, you 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.

Ben Emons is a Senior Vice President and 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, USA, as well as a Master's degree in international finance from the University of Amsterdam, Germany.

Ben has been a frequent guest on CNBC, Bloomberg Radio, TheStreet.com. He has been interviewed and quoted in major newspapers and magazines, is an expert blogger on SeekingAlpha.com, and has published articles or been quoted in PRMIA Risk Magazine, Reuters, Financial Times, Bloomberg BusinessWeek, and StockMarketWatch.com
Ben has produced a variety of webinars specifically for PRMIA and has spoken at numerous CFA conferences throughout the world. He is very active on social media via blogs, Twitter and LinkedIn.