He said some advisors have been buying GICs and money market exchange-traded funds. He recommended long short credits, which provide a hedge to help with volatility. Corporate bonds offer very good value, and longer dated bonds have historically offered downside protection during an equity sell-off.
“You need to look at your fixed income. Understand what the returns look like and where they’re coming from, then take yourself from where you’re at to the optimal state,” said Mesman. “Now’s the time to do it, given it is tax season.
“There’s a strong business case for hedged fixed income within the mix. It gets you in the market and takes the edge off because traditional bonds are going to have a tough time developing in this environment, so you really need to look at what you own, dig into it, and diversify your sources of return.”
