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What's your theory for why U.S. junk bonds (e.g., $HYG) are outperforming U.S. equities (e.g., $SPY)?
@brian1970 I mean they have the same recourse as any bondholder. They'll own the company coming out of bankruptcy most likely. The bigger issue with HY could be recovery values due to the amount of leverage coupled with the recent increase in leveraged loans. But that is going to take time to... -
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What's your theory for why U.S. junk bonds (e.g., $HYG) are outperforming U.S. equities (e.g., $SPY)?
@resjudicata I think that may be a fool's errand, at least for those not on the street and in the know. I mean the Fed said what assets they're buying and only corporate thing that I know of was the IG index. So think people probably think the Fed would next buy HYG instead of individual... -
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What's your theory for why U.S. junk bonds (e.g., $HYG) are outperforming U.S. equities (e.g., $SPY)?
@chris4god I mean I don't think buying the S&P on the dip is the worst thing. I mean now is when active investing probably makes at least a bit of a comeback. The best thing would be to find stocks you like with solid balance sheets that can weather anything. I don't know enough about active... -
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What's your theory for why U.S. junk bonds (e.g., $HYG) are outperforming U.S. equities (e.g., $SPY)?
@andyprior I mean as you found out, bonds have a floor that equities don't. It isn't so much that bonds are trading at $50 now because presumably they bought them at $100 but the average recovery value is $50. Equity can and will go to $0 so you don't have that floor. The other thing is the S&P...