by Peter Thilo Hasler is one of the few non-fiction books that deals more intensively with this asset class. While some publications have already portrayed it as outdated or out of touch with the times, the academic publications in particular are very fond of using bonds as an object of diversification. But only rarely do they also deal more intensively with the peculiarities of bonds.
This book now aims to clear this up and show readers how attractive returns can also be achieved with bonds and, above all, how to manage risk perfectly.
This is particularly interesting and valuable because bonds are not very attractive for most investors in the current low-interest phase. This is despite the fact that this instrument has been a central component of corporate financing for centuries and that bonds issued by small and medium-sized companies in particular can bring attractive returns for investors who are willing to take risks. But which bonds should one invest in at all, how do the different types differ from each other, what should one pay attention to and how do they behave in different scenarios? These are precisely the questions that the author addresses in depth in his book.
"How do you protect yourself from black sheep? How do you diversify properly? And what to do if a bond's rating deteriorates?"
After the introduction provides an overview of various forms of bonds and the main section explains how prices and yields are made up, what can cause fluctuations and how risk can be measured and assessed, this work, which is not entirely straightforward in parts, concludes with a compact summary. The 20 most important rules of value investing for bonds, as the author calls it.
This makes this book a comprehensive guide with all the advice needed to get started in active investing with bonds and is thus aimed at all investors who want to address this topic as part of their asset allocation or purely for further education.
From government bonds with negative effective yields to zero coupon bonds, hybrid bonds to corporate bonds with normal yields in the double-digit percentage range, there is something for every risk appetite.
But this book not only teaches the basics of recognizing risks, assessing them and putting together a suitable portfolio, it also explains the interrelationships involved. The author deliberately avoids complex valuation methods or formulas, and you won't find anything about the sensitivity ratios delta, rho, vega and theta in the book. Instead, however, methods and interactions are discussed that enable an investor to achieve an appropriate return with the help of a simple, comprehensible investment philosophy.
This book does not make any grandiose promises of returns. It is scientifically based, cleanly processed - admittedly also dry in some places - but valuable stock market knowledge.
For those who want to invest in bonds for the first time and for whom simply broadly diversified bond ETFs are not enough, this book is the perfect choice!