Weekly Update - Credit Yields Show You Need to Do This Soon

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I have not paid enough attention to the fixed income portfolio in these weekly messages.

That needs to change.

The income and alternative income markets offer some very attractive long-term opportunities that could easily outperform stocks over the next decade.

We have a good start. I am constantly looking for opportunities, but I have my checklist, and all the boxes must be checked.

Everything starts with credit.

I cut my teeth in the securities business back in the 1980s when we were just learning about high-yield credit and the opportunities for this new market.

The two books I read back then that have continued to be outsized influences on my thinking and process were Ben Grahams The Intelligent Investor and Marty Whitman’s The Aggressive Conservative Investor.

Both emphasize the importance of financial strength for both credit and equity investors.

However, credit strength is not enough.

Price matters and so does collectable yield.

Overpaying even for the best credits can lead to underperformance.

Price and market conditions matter for fixed-income returns.

After more than three decades in the markets, I have learned that managing income portfolios is as much about reading the right signals as it is about selecting the right securities…

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