Steve is off this week, enjoying a vacation in Nantucket. Read about that and his further discussion of the dangers/opportunity in the high yield market in his 7/25/2014 On My Radar: “Seen through my lens, another “once in a generation” buying opportunity is fast approaching. I remember saying the same thing in 1999 and 2007. The lines between generations must be shrinking as such opportunities seem to appear about once every seven years or so.”
In my 20 years of managing high yield bond investments, I’ve never seen so many signals that scream caution. Desperate to find yield, investors have poured billions into high yield bond funds and ETFs driving the yield on the Barclays High Yield Bond Index to just 5.54% — the lowest level in history. Investors are positioning in a risk they may not fully understand.
Let’s look at what will lead to the next default wave and discuss a tactical strategy that may help you further participate in price gains and also protect your wealth during periods of significant price loss.
– Forbes Code Red in High Yield.