The BlackRock Playbook for Retail Investors (with Joe Hegener from PIMCO & BlackRock)

Markets reward patience, but they also punish complacency. In this episode, we dive into the uncomfortable truth that investors will feel foolish at some point—and why that's often the price of being early rather than late. With high-yield spreads near historically tight levels and equity valuations stretched, we lay out a practical framework to pursue income, add convexity, and keep room for upside without betting the farm.

Branden welcomes Joe Hegener of Asterozoa Capital Management, whose experience at BlackRock and PIMCO informs a bond-first view of portfolio construction. We compare high-yield bonds to the S&P 500 across different cycles, showing how drawdowns, volatility, and upside-downside capture shift when you zoom out from the post-2008, zero-rate era. The conversation highlights why institutions love bonds—cash flow visibility, contractual returns, and liability matching—and how retail investors can borrow that playbook by focusing on predictable income and disciplined risk control.

From there, we get tactical. We discuss using a slice of portfolio yield to fund protection with credit default swaps, why protection can pay even without defaults, and when it makes sense to take profits on bonds trading above par. We outline a relative value stance—owning defined upside in equities via call options while shorting credit risk—to navigate a world where stocks can soar irrationally and spreads still have more room to widen than to tighten.

Then we turn to AI infrastructure, private credit, and securitizations tied to data centers—where contract opt-outs, leverage, and technology obsolescence can challenge even glossy narratives. If you want a sober plan for the next cycle—one that respects math, manages tail risk, and still leaves the door open for gains—this episode maps the terrain.

KEY TOPICS:
High-yield bonds vs S&P 500 across full cycles
Why institutions prioritize bonds for liability matching
Tight spreads versus historic ranges
Hedging with credit default swaps for convexity
Relative value: long equity calls, short credit risk
Private credit in AI data centers and tranche risk
Why surviving drawdowns compounds long-term returns

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https://ducharmewealth.com

DISCLAIMER:
Information presented on this program is believed to be factual and up-to-date, but we do not guarantee its accuracy, and it should not be regarded as a complete analysis of the subjects discussed. Discussions and answers to questions do not involve the rendering of personalized investment advice, but are limited to the dissemination of general information. A professional advisor should be consulted before implementing any of the options presented. Encompass More Asset Management LLC is a registered investment adviser with the U.S. Securities and Exchange Commission (SEC) and only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements.

[00:00:00] The Inevitable Foolishness Of Investing
[00:05:20] 2007–2024: HY Vs S&P By The Numbers
[00:10:23] Institutions, Liability Matching, And Bonds
[00:15:16] Asymmetry In Bonds And Hedging With CDS
[00:20:55] How Credit Spreads Behave In Crises
[00:26:02] Peripheral Europe And Sovereign Risk
[00:31:15] Market Structure: Equity Games Vs Bonds
[00:36:20] Defining Drawdowns And Real-Life Cash Needs
[00:41:20] Long Calls, Short Credit: A Relative Value View
[00:49:05] Tranching, Oversubscription, And Repricing
[00:54:05] Who Really Wins In The AI Capex Cycle
[00:59:05] Efficiency Gains Vs Demand Curves
[01:03:35] Closing Thoughts On Prudence