The Strategic Bond Investor : Strategies and Tools to Unlock the Power of the Bond Market [Hardcover]

Anthony Crescenzi (Author)

Book Description

Publication Date: June 14, 2002 | ISBN-10: 0071387072 | ISBN-13: 978-0071387071 | Edition: 1

A dynamic, equity-style approach to investing in today's bond market

"Tony Crescenzi knows bonds and his book proves it. From 'Fedspeak' to Treasury buybacks, The Strategic Bond Investor helps to explain the mysteries of the bond market and even offers tips on how to forecast interest rates. Sign me up—I can always learn something new!"—Bill Gross, Managing Director at Pacific Investment Management Company

Bond investing can be every bit as exciting and profitable as "playing the stock market." The Strategic Bond Investor is the first book to approach fixed-income investing from an equity-style perspective. This fast-paced book provides readers with helpful tips, tools, and strategies for tracking market sentiment, spotting market extremes, analyzing volume and liquidity, and dozens of other techniques that were­­up until now­­limited primarily to the equity markets.

The Strategic Bond Investor reveals a dramatic new approach for using bonds to balance portfolios while grabbing profit opportunities as they present themselves. It represents a new style of bond investing, bold yet risk-conscious, that is long overdue for today's transformed market environment. Investors looking to diversify their portfolios will discover:

• Key economic releases and how they influence bond prices
• Popular fixed-income portfolio management strategies
• Best-performing bonds in a variety of economic circumstances

Editorial Reviews

From the Back Cover

An Innovative Approach for Earning Equity-Style Returns­­-While Offsetting Portfolio Risks­­-In Today's Bond Market

Bond investing­­historically seen as safe, stodgy, and ultra-conservative­­can be every bit as exciting and profitable as the stock market. The Strategic Bond Investor outlines a dramatic new style of bond investing, aggressive yet risk-conscious, that is long overdue for investors who have grown weary of today's "earn it today, give it back tomorrow" stock market gyrations.

The first book to approach fixed income investing from a stock market perspective, The Strategic Bond Investor provides:

• Detailed explanations of different bond types, and how they perform in various market environments
• Key economic reports, and how they influence bond prices and profit opportunities
• Insights into how you can use the yield curve and other key indicators to predict the direction of the markets and the economy

The Strategic Bond Investor describes the tools every investor needs to take part in today's bond market­­spotting market extremes, analyzing volume and liquidity, and utilizing dozens of other techniques that until recently were limited to institutional and equity investors. Let its information and guidelines show you how to more effectively hedge risk in your overall portfolio, and uncover new profit opportunities in today's transformed investment marketplace.

"This book will help you to understand the most essential elements of intelligent bond investing. By simply gaining a greater understanding of the many ways the bond market can affect you and by utilizing the tools in this book to your advantage, you'll be on your way toward unlocking the power of the bond market..."­­From Chapter 1

For decades, professional investors have understood "the power of the bond market" for balancing portfolios, hedging investment risks, and even locking in fast-turnaround trading profits. The Strategic Bond Investor is the first hands-on, plain-English book to reveal the tricks of the fixed-income trade to a larger audience, and explain how all investors can start today to take profitable advantage of the biggest securities market in the world­­the U.S. bond market.

A long-overdue discussion of this accessible and flexible market, The Strategic Bond Investor provides insights and trading tips on subjects including:

• The five largest market segments­­Treasuries, government agencies, corporate bonds, municipal bonds, and mortgage-backed securities
• How the Fed "telegraphs" its moves, allowing investors to stay one step ahead of changing interest rates
• All about the Yield Curve­­the bond market's reliable and all-important crystal ball

In addition to the investment dynamics of bonds, this fast-paced book discusses the importance of today's fixed income market to the economy in general. From the vital role of bonds in providing capital to growing businesses to the ways in which increased securitization and innovation assure the continued growth of the bond market, seasoned investment professional Anthony Crescenzi helps you understand every market facet­­and provides you with a bedrock foundation for making profitable decisions.

Bonds have turned the corner, and are now seen as a vital component of any well-diversified investment portfolio. Learn the rules of the game in The Strategic Bond Investor, and discover short- and long-term techniques and strategies you can use to take advantage of the unlimited potential of bond investing and make it a vital component of your overall trading strategy.

About the Author

Anthony Crescenzi is chief bond market strategist at Miller Tabak & Co., and an adjunct professor in Baruch College's Executive MBA program. His work on the economy and markets is widley followed and has reached as far as the White House. Mr. Crescenzi makes regular appearances on financial television stations sukch as CNBC and Bloomberg, and is frequently quoted across the news media.

Product Details

• Hardcover: 383 pages
• Publisher: McGraw-Hill; 1 edition (June 14, 2002)
• Language: English
• ISBN-10: 0071387072
• ISBN-13: 978-0071387071
• Product Dimensions: 6.4 x 1.4 x 9.2 inches
• Shipping Weight: 1.6 pounds
• Average Customer Review: 4.1 out of 5 stars  See all reviews (18 customer reviews)
• Amazon Best Sellers Rank: #624,564 in Books (See Top 100 in Books)
  • #93 in Books > Business & Investing > Investing > Bonds

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Most Helpful Customer Reviews

47 of 48 people found the following review helpful

5.0 out of 5 stars Highly Recommend! August 19, 2002

By Satya

Format:Hardcover

Unlike books addressing stock market investing, there are relatively few investor-oriented Bond books, probably due to several reasons - (i) bond concepts are somewhat more quantitative compared to stocks, (ii) bonds have no central "bond exchanges" with readily available price quotes, (iii) bonds can't be sold and bought as easily as stocks, (iv) perception is people can't "swing for the fences" with bonds.
However, as the "Strategic Bond Investor" makes clear, it is imperative to become familiar with bond market dynamics to understand how and why interest rates are set, which in turn affects the economy and the stock market. The book does a wonderful job of laying bare the intricacies of the bond market, at the same time stays away from the more technical aspects. The writing style is very engaging, and the content is very organized. The discussion on Bond Types - how big various types of bond markets are and how they got that way, is fascinating. So are practioner-oriented "rules of thumb" permeating several chapters. Chapter on "real yields" was a bit confusing (when inflation is expected to go up or down, why do real yields move as opposed to "expected inflation"?) I initially felt the visual presentation (charts, graphs, tables etc) was somewhat limited, but as the book progressed, it seemed to be just the right amount, and contained a lot of high impact information. There is a good appendix containing a primer on economic indicators. With this, you'd be better able to judge the reaction of the market to CPI, employment, consumer sentiment, etc., etc.
The book seemed somewhat repetitive at places, but still read well. With this book, one should be able to answer: (1) How can bonds be expected to perform given the current economic information, market sentiment, etc. (2) what types of bonds can be expected to do better? I highly recommend the book for purchase. Another great book for the bond investor would be William Gross's "Everything You've Heard About Investing is Wrong!"

42 of 43 people found the following review helpful

4.0 out of 5 stars complements Thau February 17, 2005

By Jeff Lipkes

Format:Hardcover|Amazon Verified Purchase

By far the best introduction to bonds is Annette Thau's The Bond Book. But Thau makes no attempt to explain why the price of a given bond fluctuates over time. Crescenzi, one of the most frequently cited of the legion of professional Fed watchers, tries to make up this deficiency, describing the impact of Fed moves, market perceptions of the state of the economy, the supply of new issues, etc. on bond prices.

But Crescenzi has a much more ambitious agenda. He explains how the yield curve can be used to forecast developments in the economy. Other chapters summarize how to predict trends within the bond market, from analyzing the put/call ratio to interpreting the economic data that a dozen or more agencies spew out every week. He makes the case that knowing the bond market will be useful to anyone with a credit card in his or her wallet.

Crescenzi also wants the book to serve as a general introduction to bonds. There are chapters on "bond basics," types of bonds, risks facing the investor, and then inexplicably late in the book, chapters on credit ratings and using the internet. The latter is particularly weak chapter (Thau's isn't much better.) For whatever reasons, Crescenzi doesn't explain clearly how to use the internet to research individual bonds and check recent trades, and doesn't give the URLs of the sites that let you do this and purchase bonds.

If it sounds like the book is a bit of a hodge-podge, that's because it is. The book's organization leaves a lot to be desired, apart from the scope being too broad. Not only is the sequence of chapters mysterious, but there's a fair amount of repetition. While the writing itself is pretty lively, or at least conversational, I'm not sure Crescenzi has figured out his intended audience. Even though this is an introduction, some readers are bound to feel he's assuming too little and being condescending at times.

The best chapters are probably 7,8, and 9 on the yield curve, real yields, and rate forecasting. Crescenzi apparently wasn't trained as an economist or historian, and when he tries to describe the effect of interest rates on politics, he goes awry. A big fan of Clinton, he imagines Hoover believed in and practiced "laissez faire" and that budget deficits inevitably result in high interest rates. A chart of deficits as a percent of GDP vs. the yield on the 10 year note would reveal the wrongheadness of this claim. In general, there are far too few charts and graphs thoughout the book. Many more important points ought to be represented graphically--like changes in yield spreads in Ch. 12.

Still another gripe--munis get slighted throughout the book.

Despite these negatives, The Strategic Bond Investor fills an important niche and is definitely worth reading. Crescenzi is an ethusiastic teacher and he makes a fairly complex subject accessible. Though there are certainly books introducing readers to the economic indicators and explaining the Federal Reserve System, I don't know of another book that tries to make the bond market as a whole intelligible to outsiders. Hope he gets a chance to revise this in a second edition.

34 of 45 people found the following review helpful

2.0 out of 5 stars The Stategic Bond Investor - Disappointing March 6, 2005

By L. Bratkovich

Format:Hardcover

Although this book contains good information on types of bonds, yield curves and things that affect the bond market and interest rates, I found it disappointing. To me, it was overly wordy and sometimes repetitive. At times, I felt that I was slogging through molasses. My biggest disappointment was that it did not get into the specific bond investing actions that an individual like myself would take using the information presented. There was nothing about things that I was interested in i.e., bond laddering, bond mutual funds, convertible bonds, when to buy or sell short, intermediate and long term bonds, etc.