By Brian L. Kloss, JD, CPA
Using the proverbial American baseball analogy, the U.S. credit cycle is in the late innings of the game, but there are still some good plays left. Managing these later stages requires skill, and it becomes a game of careful security selection in certain asset classes. Investing in a mature credit cycle also means that managers should look for end-of-the-cycle signals like a rising default rate, weighing the benefits of defensive characteristics versus attractive valuations, and anticipating monetary and fiscal policy responses.
Defaults
We find that looking at forward default