Impact Of Junk Bonds On Trading by Andrew Sachais
When should you be in equities and when should you hold cash and stay on the sidelines? Here’s a simple system that can help to answer that question.
Over the last few years, the widening yield spread between US junk bonds and treasuries has predicted heightened volatility in financial markets. Although many investors track yield spreads as a source of insight into credit market health, equity investors can similarly utilize simple bond tools to gauge sentiment. Through our findings, we’ve devised a remarkably simple system that indicates when to be in equities and when to hold cash on the sidelines...