Rick Rieder runs global fixed income at BlackRock. He sees a "historic" opportunity in high-quality bonds.
Historic. Like the Hindenburg. Like the Alamo. Historic does not always mean good.
Bonds are the asset class where excitement goes to die. Rieder found a way to make them sound like a moon landing. That is a gift. A terrible, beige gift.
Consider the product. A bond is a loan. You hand someone money. They promise to hand it back, with a small thank-you note attached. Rieder wants you to know the thank-you note is historically large. High-quality, no less. Not medium-quality. Not "my cousin's a great guy" quality.
He laid out his fourth-quarter expectations. Fourth quarter. The three-month stretch where retail traders buy a sweater and call it diversification.
Here is what will happen. Someone will read this headline and open a bond ETF. They will look at the chart for eleven minutes. The line will move a fraction of a percent. They will sell it and buy a leveraged fund named after a bear.
Rieder is a professional. He manages money for institutions that wear quarter-zips to funerals. He can wait out a bond. Patience is his entire personality.
You cannot. You get nervous during a microwave countdown.
A historic opportunity requires one thing. Sitting still. Historically, that is the one trade you have never closed profitably.
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