Stocks have a very high inverse correlation to high yield debt spreads. While many credit indicators have been improving in recent weeks the high yield spreads continue to widen. The stock market likewise, has remained very weak. We are likely to see high yield spreads come in before any stock market recovery ensues.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.