“Not see the forest for the trees” is an idiom derived from British English that describes someone who is so focused on the minutiae that they miss the larger picture.

Investors would have done well in 2016 to heed the words of Heraclitus, paraphrased: “Expect the unexpected.” Brexit and the U.S. election results were two glaring examples of the unexpected becoming reality.

We still believe our economy is likely to remain in a slow growth and low interest rate environment for some time. If rates do indeed get pushed lower by the relentless search for “safe-haven” yields, then other markets, such as high yield bonds, may follow. Since shorter duration, high yield bonds currently offer meaningfully higher yields than Treasuries, a further boost caused by a rally in Treasuries accompanied by flat or even tighter spreads could have a further positive impact on total returns in high yield bonds. Given the possibility for higher market volatility going into the election and beyond, we are keeping our defensive, shorter-duration bias and maintaining ample liquidity. Hopefully we can take advantage of bouts of market weakness to acquire both convertible and high yield bonds at attractive yields.