CreditTrader

Why I Favor High Yield and Preferred Stocks

Don't forget to hedge your Treasury risk! Given where we all know Treasuries are going, your willingness to buy JNK or HYG on valuation basis requires that you sell TLH or some such to benefit from the cheapness of spreads relative to real default risks. I have heard so much from the mainstream talking heads on buying bond ETFs and yet none of them undertand the difference between yield, spread, and real performance.