BlackRock’s Rick Rieder urges investors to show ‘dynamic patience’ — and get paid to wait

Amid the markets' twists and turns, BlackRock's Rick Rieder believes "dynamic patience" has become essential for navigating the turbulence. The 10-year Treasury yield hit a new high for the year after wholesale prices for April came in hotter than expected on Wednesday. The benchmark Treasury touched 4.49%, its highest level since July 17. The Dow Jones Industrial Average and S & P 500 moved lower, while the Nasdaq Composite was boosted by gains in chip stocks. Rieder's theory of "dynamic patience," which he laid out in his second-quarter fixed income outlook Wednesday, centers on building income, being creative in deploying capital and opportunistic with duration. That will help investors ride out the ups and downs of the bond market, which will continue to be defined by tensions between macroeconomic issues and the most attractive yield opportunity in more than a decade, said Rieder, BlackRock's chief investment officer of global fixed income. "There's a short term nature to what we're doing and I think there's a longer term — meaning patience. Income works for you. Compounding works for you," he said in an interview with CNBC. "If you stay in it, return ends up being pretty good." But in the short term you have to manage risk. One way is to take advantage of the interest rate volatility, because Rieder doesn't think yields will ultimately move too high, he said. …