The past year has been volatile for stock returns as people have generally sought out quality and yield while dabbling in stocks. The flight to yield benefitted fixed income broadly, Treasuries, high quality corporates and even junk debt have all gained over the year. People have sought yield in more exotic areas - international debt, bank loans and preferred shares, as well as trusty old dividend paying stocks.
The past few days, however, yield was no longer equated with quality as investors dumped the more exotic income instruments for the best quality corporates and US Treasuries. Yields are next to nothing (even closer to nothing than they were before!) on Treasuries while opportunities have opened up further down the credit spectrum.
