Nothing is screamingly cheap.
The easy money has been made in both equities and fixed income. From the low point in March, it seems you can’t pick an asset class that hasn’t gained something in the area of 60%. That was some fear discount back in March.
During this universal recovery, as in most post-recessionary periods, lower-quality high-yield bonds have outperformed quality issues, and lots of smart guys who had the guts and money to buy them at the depths are cashing out–convinced that risks of continued exposure outweigh possible rewards of staying long.”It’s past the time to lighten up, no reason to chase risk assets from currently lofty valuations,” says Paul McCulley, managing director at Pimco. “To the contrary, the time has come to begin paring exposure to risk assets, and if their prices continue to rise, paring at an accelerated pace.”
