As we close out the first quarter of 2016, investors reading the tea leaves should be concerned.  The price collapse in almost all commodities and the recent severe indigestion in US credit markets reject the notion that the global economy is going to grow at a rate greater than 3%.  With the weakness we are seeing globally and other developed nations focused on further quantitative easing, the idea that the US economy will be unaffected is not realistic.  Demographics remain the elephant in the room; this is no longer a future discussion but one that is now exerting its influence.  Final demand for many goods and services will continue to fall as the globe ages.  Importantly, demand for stocks by both institutional and individual investors looks to be rolling over.  With limited global growth and poor technicals, we believe it is likely we are beginning a secular trend that will compress equity valuations.  As demand moves from equities, we expect it to transfer to credit in this zero sum game.

Within this framework, we believe the high yield market offers investors an attractive alternative to equities and provides investors with the potential for higher yields/income than is available in various other fixed income options.  This market offers income focused investors a way to generate a steady income stream and the potential for capital appreciation to help drive long-term returns.  Click here to read more.