Thoughtful Money with Adam Taggart Bonanza Of Bargains For Income Investors? | Steven Bavaria
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May 3, 2026 
Steven Bavaria, creator of the Income Factory and income investing expert, explains why recent panic in private credit may have driven prices too low. He highlights deep discounts in BDCs, dynamic credit funds, and midstream energy closed-end funds. Multiple short takes on market overreaction, liquidity gates, and where yield-seekers might find bargains.
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Income Yield As An Alternative To Equity Total Return
- Steven Bavaria aims for 9–10% annual returns by collecting high income rather than relying on capital appreciation.
- He compares this to equity total return (≈1.5% yield plus ~8% capital gains) and prefers steady cash yields to avoid emotional selling.
Price Drops Can Boost Income Reinvestment Power
- Falling market prices can increase your effective yield because you reinvest income at lower prices.
- Bavaria explains a bond paying $10 on $100 still pays $10 even if market price falls to $90, boosting yield on cost when reinvested.
Model Defaults Using Recovery Rates Not Worst Case
- Expect defaults but model realistic recovery rates (e.g., 60–70% recovery on senior secured loans) to estimate portfolio losses.
- Bavaria shows 10% default with 30% loss per default equates to ~3% portfolio loss, manageable vs. equity drawdowns.