Junk Bond Investors enjoy higher rates of return as compared to other fixed income investments.Investors should use this powerful bond market to loosen up on investment grade bonds and purchase only short dated government securities and to begin to accumulate an aggressive junk or high yield portfolio.During a weak economic environment or in a recession junk bonds tend to fall in price as the default risk increases. For investors that do their homework lots of opportunities will begin within the next 18 months.
Based on credit ratings junk bonds are those with a Baa rating or lower from Moody's and a BBB rating or lower from S&P. Bonds with a C rating are speculative and a D rating is a defaulted security.
Steve V.
Performance Plus Advisors, Inc.
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