Short-term investing: Creating capital appreciation through bonds
In the current environment, managing short-term investments presents unique challenges for investors due to uncertainty. For investment management firm PIMCO, the short term is defined by capital preservation practices, typically in the 0-to-5-year range on the yield curve. PIMCO head of short-term portfolio management Jerome Schneider joins Asking for a Trend to emphasize the importance of managing cash effectively as interest rates fluctuate, especially across savings accounts. "Simply staying invested in how you manage your cash and focusing on that is incredibly important to performance these days. So, as people still continue to seek safety in this environment, we want to be very cognizant of how they're doing so, and bond yields (^TYX, ^TNX, ^FVX), as a whole, can do that," Schneider says. He also cites having interest rate exposure as a means to "prevent that left tail risk and create some capital appreciation." Schneider also highlights the global divergence in interest rate policies, noting that "there’s a divergence in interest rate policies" from central banks around the world, which creates unique opportunities. Watch the video above to hear Schneider fully share his insights on effective cash management while also offering advice on navigating bond investments. To watch more expert insights and analysis on the latest market action, check out more Asking for a Trend here. This post was written by Josh Lynch
