BANX - YH CEF Weekly Commentary | Feb 27 2022

• The market rallied back from two and a half weeks of losses to finish the week in the green. The "sell the rumor, buy the news" adage comes to mind.
• It is unlikely we are out of the woods just yet - especially if the war escalates to include neighbors, or worse, NATO. I would be cautious about buying heavily here.
• Discounts continued their widening trend that has been going on since the second week of January. Taxable bond CEFs widened by 70 bps while munis widened by 40.
• Taking the counter-cyclical approach is the way to make money. And getting the timing exactly right is necessary if you can look beyond short-termism and focus on holding a position for a year or longer.
• I still don't think we will see 8 rate hikes this year and continue to nibble at duration. I am patiently waiting for the Fed meeting on March 15-16 as I think we could see a sell the rumor, buy the news rally in duration.

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