Even with the stock market tanking the past few days, investment grade and high yield bonds have held up extremely well. The same goes for preferred stocks.
Below are charts of the LQD, HYG and PFF ETFs. LQD tracks investment grade corporates, HYG tracks junk bonds, and PFF tracks preferred stocks. As shown, all three have been doing great since mid-May when they hit turbulence during the euro-crisis. Investment grade corporate bonds have done the best over the past few weeks and are trading at 2012 highs, while junk bonds and preferreds are close to their 2012 highs. During market panics, these three asset classes get thrown out along with stocks as investors raise cash. While stocks are down 3%+ since the July 4th holiday, LQD, HYG and PFF have hung in there.
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