Fixed income is "a kind of mystery to a lot of people," Jones says.
Kathy A. Jones, senior vice president of fixed income strategy at Charles Schwab, began her financial services career when the industry wasn't exactly rolling out the welcome mat for women. This was back in the 1980s. Jones' way of bucking the system? "I chose to do my best to fight my way through but not take on fights I knew I couldn't win," she tells ThinkAdvisor in an interview.
Some may peg the fixed income arena as dull. Not Jones. She calls it "fascinating." Indeed, she's energized education for investors and FAs about bonds. They're "a kind of mystery to a lot of people," she says.
In the interview, the Chicago native, 64, offers her 2021 forecast for bonds and outlines a strategy for the best way to invest in them against a backdrop of the coronavirus pandemic, economic recession and a host of international gyrations.
She joined Schwab in 2011 in New York City as chief fixed income strategist. Heading a team of eight, her responsibilities include credit market and interest rate analysis; and for the Schwab Center for Financial Research, she runs the fixed income and currency strategy group.
For most of her career, she worked at Prudential Securities, where she rose to executive vice president of the debt capital markets division. Her path also embraced executive managerial posts at Morgan Stanley Smith Barney and a stint at PaineWebber. During much of this time, she was also raising a daughter and son.
Jones grew up the youngest of seven kids, the bookworm in a working-class family living in Evanston, adjacent to Chicago. She had no grand plan to work in finance while studying at Northwestern University, from which she received a B.A. in English literature. But once in the industry, she picked up an M.B.A in finance from the University's Kellogg Graduate School of Management.
ThinkAdvisor recently interviewed Jones, who was speaking by phone from New York City. The fixed income investment strategist with a lighthearted sense of humor is nonetheless serious when, talking about her job, she says: "This is what I like to do. This is where I want to be."
Here are highlights from our conversation:
THINKADVISOR: What prompted you to work in financial services?
KATHY JONES: I was looking for a job and my older brother said, "You're probably not good for too much, but I have a friend who'll hire anybody. So why don't you give Wayne a call?" Wayne was working at the Chicago Board of Trade — and I got a job.
Doing what?
I was a runner on the trading floor. You'd take a paper ticket and run it into the trading pit and hand it to the broker, then run back out. You'd keep going back and forth. I immediately thought it was the most interesting place I'd ever been. And the cast of characters was phenomenal. You can't make up some of the stuff I saw.
Did you advance from being a runner?
There weren't a lot of places to go unless you had a lot of money to leverage into owning your own seat to trade. But I had taken a class in the futures markets, and the professor gave me a good recommendation to Smith Barney, who was looking for a research assistant. I got the job.
You're Schwab's senior vice president for fixed income strategy. Most people would say stocks are exciting, bonds not so much. What's exciting about fixed income?
It's a fascinating area because it's more directly tied into the macro economy trends rather than the specific trends that stocks tend to follow. I also like the math part because with a bond, you can come to a reasonable conclusion about what your rate of return will be, whereas with stocks, it's kind of guesswork.
What else do you like about working in the bond area?
I've always loved the teaching end. The fixed income world isn't well understood by everyday investors or even some advisors. I saw an opportunity to be the person who could interpret what was going on and help people understand fixed income — how it fits into a portfolio, why you use it. That's a kind of mystery to a lot of people. They understand stocks really well, but not bonds.
You've worked in the male-dominated financial services industry for a number of years now. Have you encountered obstacles or bias because you're a woman?
I certainly had my share of experiences that were unique to being one of the few women in the industry at that time. But I don't dwell on the hurdles. My attitude has always been: Get past it and keep moving.
Did you have any mentors?
Not in the formal sense. But early in my career, I benefited greatly from wonderful bosses who were really helpful and never held me back because I was a woman. They focused on my capabilities and competencies. Some other people were not so great [to me].
