2022-09-07

Investment Grade Corporate Bonds at Pandemic Panic Lows

Strip out dividends and LQD is near its 2020 low. If this looks like a bounce to you, buy TLT instead because TLT will bounce if credit risk rises, but LQD and other corporate bond funds will not. In a bear scenario, rising credit risk offsetts a dip in rates and the spreads on corporate bonds blow-out as in March 2020 or 2008. I have opened an OTM call position on TLT for October. Stop right under the 52-week low.

No comments:

Post a Comment