BlackRock's Rick Rieder Reveals the Way of 'Dynamic Patience' in Choppy Markets

• 'Dynamic patience,' a key strategy is, focusing on income generation amidst market swings.
• Interest rate volatility, manage wisely, using options and moderate exposure, you must.
• Securitized assets, particularly MBS, and select emerging market bonds, Rieder favors for opportunities.
• Diversification, the path to stability is, particularly in fixed income securities, yes.

The Force of 'Dynamic Patience'

Turbulent the markets are, hmm? Like a swamp on Dagobah, unpredictable they are. Rick Rieder of BlackRock speaks of "dynamic patience," a strategy vital it is, for navigating these uncertain times. Focus on income, be creative in deploying capital, and opportunistic with duration, you must. 'Patience you must have, my young Padawan,' as I always say. Strong in the Force, this strategy is, for weathering the storms of the bond market.

Interest Rate Exposure, Manage Wisely You Must

Volatility in interest rates, a constant presence it is. Manage risk, you must, by taking advantage of this volatility. Rieder believes yields won't rise too high, ultimately. Move your interest rate exposure around, per the regime you are operating in, he says. 'Try not. Do. Or do not. There is no try,' but in this case, a little 'try' is acceptable. To understand Uber's volatile earnings, you can review Uber's Earnings Ride: A Heisenberg Perspective to get a better idea of how even large cap stocks can be volatile

Income Over Spreads, The Path It Is

Concentrated duration bets, avoid them, yes. The Fed's rate path, uncertain it is. Focus on assets that compensate you for holding them through volatility, you must. Yield, where the opportunity lies, since credit spreads are tight. 'Luminous beings are we, not this crude matter.' Luminous yields, find them, yes.

Opportunities Abound, If See Them You Can

Securitized assets, Rieder's favorite play they are. Commercial- and residential-mortgage backed securities, specifically. Class A properties in New York, fully leased, opportunities tremendous they are. Diversify regionally, within residential MBS, you can. Like the Force, securitized assets surround us and bind us.

Emerging Markets and High Yield, Consider You Must

Europe, growth slowing, rates coming down, total return performance, tremendous it could be. Emerging market bonds, select opportunities there are. Mexico, Brazil, parts of Asia, Rieder likes. U.S. high yield, a good core holding it is. 'Always two there are, no more, no less. A master and an apprentice.' High yield and emerging markets, perhaps?

Diversification, The Key Is To Stability

Diversified, investors should be. The bond market, plenty of opportunities it offers. 'Size matters not. Look at me. Judge me by my size, do you?' The equity market, returns concentrated they are. Fixed income securities, a million and a half there are. Create real diversification, you must, in what you don't have in your equity portfolio. Historic, truly it is.