Time to Sell Overvalued Treasuries, Add to High Yield Holdings

Investors should consider reducing their Treasury holdings after the run up this year and increase their high yield exposure after the recent selloff, said Heather Loomis, West Director of Fixed Income for JP Morgan Private Bank. Loomis added that preferreds are another alternative for yield-seeking investors because they are tied mostly to bank credits which have been steadily improving in the past few years. She said municipal bonds have also gotten a bit expensive so investors need to be selective before adding to their positions. Finally, Loomis said investors should be wary of European bonds due to a weak Euro.