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March 9, 2009, marked the bottom of the market for the period now known as the "Great Recession." So, today is an anniversary -- of sorts -- for the recovery that began two years ago. A quick review of where we currently stand can provide insight for future investment opportunities.

One of the catalysts for the recovery was the repeal of the "mark-to-market" accounting rules that allowed banks to carry debt on their balance sheet at a price they considered fair instead of what it was actually worth. Since banks use leverage based on their reserves, their ability to lend was severely limited as the value of their reserves was plummeting.

More than a year into the recovery, the banks' balance sheets were still in pretty bad shape. Therefore, last August, the

Federal Reserve

announced a second quantitative easing program (QE2) whereby the Fed would purchase Treasuries from the primary broker dealer firms to pump more money into our economy.

Some of the desired results Fed Chair Ben Bernanke's had in mind when he launched the QE2 program have come about from this action . Investor and consumer confidence has risen, and unemployment has gone down. Also, the stock market has been on quite a run since QE2 was announced. Late last summer the recovery looked as if it might stall out with negative implications for the market and the economy.

However, a few unintended consequences have resulted from QE2. One is that interest rates have risen. It was the Fed's intent that by purchasing Treasury bonds in mass quantities, interest rates would remain low, which would aid the housing recovery. So far, that has not happened.

A second but debatable event has been the huge spike in global inflation, which is causing social unrest in many parts of the world. International experts have declared that the rising food and energy costs are a direct result of our money-printing operations. Our Fed Chair disagrees.

What can be agreed upon by all, however, is that a sustained increase in the price oil, food and other commodities can derail the recovery. In addition, the economy has yet to demonstrate that it can stand on its own, without government support. We need a quick resolution to the oil problem to mitigate systemic risks.

The markets staged a large rally yesterday after Monday's big decline. The only thing missing on the rebound was volume. We are forming a pennant pattern on the major indices, bounded by the February 18 high and the February 24 low. Experts are arguing which way the break will go. I think it is more important to be ready for either outcome because when the market does finally pick its direction, the move will likely be substantial.

One sector that has held up quite well both during the short term and since the market bottom of two-years ago is high yield. The

iShares iBoxx $ High Yield Corporate Bond Fund

(HYG) - Get Report

and

SPDR Barclays Capital High Yield Bond

(JNK) - Get Report

are two ETFs that pay a nice income, while displaying price stability in what has been a volatile environment.

HYG has an 8% yield and is trading near $91.91. It has a low expense ratio of only 0.50%, and is very diversified with more than 400 holdings. Place a stop at $85.75. JNK is paying 8.8% and has only a 0.40% gross expense ratio with 215 holdings. JNK was trading near $40.50 at the time of publication. Place a stop at $37.10 for protection.

The markets have rallied significantly over the last two years, but are now encountering some headwinds that could potentially cause a near-term correction. High-yield bonds are still holding up well in this environment and with their superior income should provide stability should the markets pullback.

At the time of publication, Slusiewicz held no positions in any securities mentioned.

Jerry Slusiewicz has over two decades of professional investment experience. He has worked with individuals and institutions to manage monies for both short and long-term investment horizons. This extensive experience through various stock and bond market cycles enables him to offer a unique blend of professional investment counsel and personal service.