U.S. in 'Sweet Spot' for Taking Credit Risk, Federated's Gallo Says

The video discusses strategies for managing duration and credit in fixed income investments as we approach 2020. It highlights the success of long-duration assets in 2019 and anticipates a neutral stance moving forward, with potential risks from the US election. The credit market has seen significant gains, particularly in high yield, but caution is advised due to valuation concerns. Overall, the economic outlook remains stable, with no expectation of sharp rate increases.

What was a key factor in defining fixed income returns in 2019?

• Liquidity

• Inflation

• Duration

• Credit risk

What is one potential risk to the economic outlook for 2020 mentioned in the transcript?

• Technological advancements

• Rising inflation

• US election

• Global trade agreements

How is the US economy expected to perform according to the transcript?

• It is expected to stagnate.

• It is expected to decline sharply.

• It is in decent shape with no sharp re-acceleration.

• It is poised for rapid growth.

What was a significant trade in the credit market in 2019?

• Shorting high yield bonds

• Focusing on AAA bonds

• Investing in high yield munis

• Avoiding mid-grade bonds

What adjustment was made in credit strategy for 2020?

• Increasing exposure to high yield

• Concentrating on mid-grade bonds

• Focusing on AAA bonds

• Reducing all credit exposure