10. Convertibles For...

The beauty of convertibles, as well as the source of opportunity in them, lies in their malleability. At different times in their lives, they can be appropriate for significantly different investor groups. And although they are most commonly held by hedge funds and large institutions, they offer, as I have contended, the elements most commonly sought by individuals: income, capital preservation, and upside potential.

For each constituency, though, a slightly different approach to convertibles makes the most sense. Each group can make best use of convertibles with its own unique toolkit and time horizon. In this chapter, we’ll focus on how you can take advantage of the resources best suited to your own situation.