COVID-19 has crippled the global economy, and it’s unclear exactly when economic and market activity will return to business as usual. The uncertainty has markets reeling. But periods of maximum uncertainty often make the most attractive entry points. Why?

  • Market valuations typically overreact during periods of high uncertainty, discounting much more pain than will likely materialize. As uncertainty fades, prices often come roaring back.
  • Recoveries have yielded outsized returns; holding and adding to credit allocations through downturns has been rewarded handsomely in the past.
  • Security-specific opportunities open up. Fear, forced selling and other factors create dispersions that credit pickers can potentially capitalize on.