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I discovered awhile ago that so-called "junk bonds" are in fact very rewarding investments that are actually only risky by comparison to other bonds, and not by
by aerovistae 6y ago
I discovered awhile ago that so-called "junk bonds" are in fact very rewarding investments that are actually only risky by comparison to other bonds, and not by comparison to other popular asset classes like stocks. Been making $120/year off an $800 bond I bought that has grown in value to $950. Win!
- 55555 6y agoDo you have any recommended reading on this?
- aerovistae 6y agoI can't say that I do-- I mostly learn about investment things by googling a question or a term and then reading all the results that come up and mentally aggregating what they have to say. I will add that The Balance and Investopedia have been the leading sources of my education, all in all.
- mNovak 6y agoI'd be curious to see a comparison of the return on junk bonds of a given company against the actual stock return of the same company.
- kccqzy 6y agoWell you get compensated for increased default risk so certainly.
- hellbannedguy 6y agoHow many years? What junk bond?
- JMTQp8lwXL 6y agoSomeone should brand junk bonds like they did with peer-to-peer lending. The latter was a bust (time and time again, I've read about the ills of P2P lending returns), but there could be a great dual-sided market opportunity for the former.
- tryptophan 6y agoThe risk/reward ratio on junk bonds is much worse than that of stocks or normal bonds. If you want less risk than stocks, just titrate to your desired risk level using a ratio of treasuries and stocks. Fore example, 80% stock, 20% bond gets you the same risk as 100% junk bonds, but you get a 9.5% return instead of 5.3%.