Keep Optimistic And Carry On

http://ift.tt/1cwhgje By Scott Minerd:

Investment themes tend to last for long periods and often take longer to play out than many investors expect. Nowhere is that more apparent than in bond markets, where there has been much concern about rising interest rates. While U.S. interest rates should rise over the long-term, it is not a major risk in the near-term and will likely make for a benign investment environment. The strong equity returns and rising rates in 2013 were welcome news for pension funds and helped to erase some of their underfunding. Now, they appear ready to rotate back into debt, which should provide solid support for fixed income and subdue the risk of long-term U.S. interest rates rising significantly in the near-term.

Broadly speaking, the ongoing trend of rising stock prices in the United States points to risk-taking that should translate into further spread tightening in credit. On a relative value basis, two

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