McGough said high yield ex-energy differs from high-yield products in the energy space, for example.
“No two bear markets are the same,” he said. “For instance, when the Fed started with QE [quantitative easing], we thought commodities would go to the roof, which they haven’t. So make sure you understand what you own.”
McGough said financial advisors need to know their clients’ risk tolerance and concerns about market disruption, and to plan accordingly. And if they express fears about another market meltdown, there is only one true safe haven.
“In times of severe stress, cash is the only way to preserve capital,” he said.