New income opportunities from TINA to TARA
After years of loose monetary and fiscal policies when both volatility and risk were gradually suppressed, bond yields fell to nearly 0% or even below zero. Investors had no choice but to invest in equities to find reasonable returns. That was the era of TINA: There Is No Alternative (to equities).
Those days are now past.
The transition to TARA (There Are Reasonable Alternatives) has been painful for bondholders, but necessary. The recent dramatic surge in bond yields and the widening of credit spreads have finally created some opportunities in the fixed income space for investors with a lower appetite for risk.