Both of these areas offer extremely high yields without sacrificing quality. Remember that quality should not be sacrificed and only clean structures should be used. Conclusion W e feel that the latest inversion in the yield curve is a condition that generally signals lower rates to come. We feel the most logical reason for the inversion is that demand for longer-term securities now outstrips the demand for short and intermediate term bonds. Additionally, we feel that the market has over anticipated the future movements by the Federal Reserve board and could rally on rate hikes.
W e suggest high quality longer duration discount fixed income securities.
Call protection is important.