Bonds: The Unbeaten Path to Secure Investment Growth

FOREWORD

BY VIRTUE OF opening this book, you can count yourself among those who have chosen to explore the world of bonds and bond investing.

You won't see many books about bonds on the New York Times bestseller list. Bonds are after all the most predictable, and boring, of investments—we hope! You see, for bonds, boring is good. The principal and interest promised are fixed.

Not many people start out intending to focus on bonds. Even my boss, the "Bond King" Bill Gross, chief investment officer and founder of the $600 billion bond giant PIMCO, admits that in his early twenties his goal was to find a job as a "stock jock." Instead, his first job in the industry was as a bond analyst whose duties included literally clipping coupons in the basement vault of an insurance company. Who would have thought such a humble beginning would lead to a career as a media and investment giant? It is precisely because bonds are underestimated and underrated that they deliver the unexpected.

I crept my way into fixed income in a similar way, when I realized that my love for competition, math, and political economy intersected with the role of a fixed-income portfolio manager. The choice left my friends, parents, and professors perplexed. After all, the returns on safe bonds are modest and their upside capped. Still, PIMCO, the firm Bill Gross and I work for, has attracted $600 billion based on investors' need for cash flow and security.

And now here you are, book in hand, contemplating a dramatic change ...