On The Quest For Yield
In a market that is flirting with all time highs, many individuals and institutions are on a quest to obtain high yields. With government bonds and higher risk corporate alternatives offering anemic rates of return in addition to significant risks, many investors have turned to other asset classes.
If you have been following my articles, you will have understood by now that I am quite worried about this phenomenon, termed "Flight-to-Yield." As inflation and low risk free yields force more cash into the equity space, many conventional alternatives including utilities and blue chip stocks have had their prices bid up, lowering their yields and increasing the potential for a significant drawdown when interest rates rise....
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