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Strategies & Market Trends : Value Investing

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To: E_K_S who wrote (56665)1/16/2016 11:04:20 AM
From: Spekulatius  Read Replies (2) of 72296
re valuation - the FED model is irrelevant. I think the better indicator are the high yield bonds. When you look at those, (JNK, HYG), they have performed even worse than the SP500 (down 7% last year )

The meltdown in the high yield (junk) bonds is very pronounced and often correlates with issues in the economy or predates them. Also remember the issues with the 3rd Avenue junk bond funds that eerily remind me of the issues in the bond markets seen early on in 2007.

I think the bond market has better opportunities than the equity markets right now - equivalent pot. returns, but with less risk. The main issue is much less liquidity. From a value perspective, the overall market is not cheap, especially considering the fissures in the economy, so one should be careful scaling in.

Very good discussion taking place here, imo.
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