February 6, 2020 — The WHO has called the coronavirus crisis outbreak a “public health emergency of international concern.” This declaration has implications for the entire world economy, but certain sectors will be affected more than others. Transportation, Energy, and Basic Materials are most likely to be adversely impacted by a large decrease in demand for travel, fuel, and raw materials in the Asia-Pacific region. In light of this, we examined the exposure in our fixed income portfolios to a potential fallout from the spread of the virus.

January 1, 2009 — Over the last couple months market strategists, money managers and more recently the media have been highlighting the attractive yields and historically wide yield spreads over Treasuries that have been available in high-grade corporate bonds. Indeed, our most recent Special Report to clients in November titled “Bonds are Better”, highlighted the relative attractiveness of bonds, specifically high grade credit vs. stocks. In December corporate bonds realized some of this upside potential with corporate yields, based on the Barclays High-Grade Bond Index, falling from over 8.5% to 7.5%, netting investors a 6.5% total return for the month.

November 1, 2008 — Investing during the last several weeks within an environment of rapidly declining asset values and record volatility has been more about damage control than implementing a pro-active strategy. Given the extent of recent market losses, most asset allocations have seen sweeping, dramatic changes and as a result investors are now faced with difficult portfolio rebalancing and tactical investment positioning decisions. While we support the investment notion of employing a periodic rebalancing policy for strategic allocations, we would caution against an aggressive move back into equities at this time. Even given the magnitude of the sell-off across the global equity markets, when one weighs the macro environment, relative asset valuations and the probable upside and downside market scenarios, we believe a stronger case can be made for significantly enlarging allocations to the fixed income sector, especially high-grade credit, for better returns versus equities over the next six to twelve months.