“If the phone doesn’t ring, it’s me,” is one of Your Survival Guy’s favorite song phrases. Because when markets get volatile like they are now, partly because of the situation in Iran, my phone doesn’t ring. It’s pretty quiet in my office, tucked away on a tree lined street. As one visitor said to me years ago, “It’s like the library in here.”

Sure, I’m on the phone like I always am, but it’s mostly me calling you. But in the world of private credit, a fancy name for non-publicly traded junk bonds, I can imagine phones are lighting up with investors wondering how “they’re” doing. That’s the other side of the coin in non-publicly traded securities. Prices are relative.

Recently, for example, one of the leaders in private credit said the situation isn’t as bad as headlines are making it out to be. Which may be true. But when investors demand their money back, the only way to get it to them is by selling—a zero sum game in which seeking out a price is like a boat lost in the fog. You just don’t know where you are, until you do.

When you look into the night sky at Dick Young’s North Star, you can see the fixed income risk free rate or treasury note yield, which could guide you on your fixed income journey. Any return above that beacon in the night or the spread gives you an idea of how investors are measuring risk, with a narrow spread meaning risk isn’t at much of a premium.

Action Line: Remember, there’s nothing wrong with making money slowly, and when the phone doesn’t ring, rest assured, it’s me. And when you want to talk, email me at ejsmith@yoursurvivalguy.com.

Read the entire series here.

Originally posted on Your Survival Guy.