Fearful Investors Should Buy Credit, Sell Stocks, JPMorgan Says
- Yields on blue-chip bonds are high relative to dividends
- Buying company’s bonds and selling shares can lock in returns
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Investors looking to protect themselves against more market turmoil should think about selling some blue chip companies’ shares and buying the corporations’ bonds instead, according to JPMorgan Chase & Co.
Such trades can generate more income for investors: yields on investment-grade corporate notes averaged 4.4% as of Monday’s close, according to Bloomberg index data, compared with the S&P 500 average dividend yield of about 1.5%. The current gap between the two yields, of about 2.9 percentage points, is the widest since 2009.