Bonds can be Great too.....

WallStGolfer31 · #1 (**permalink**) 12-10-05, 07:13 PM

Yes they can!

Anyone else here interested in high yeild portfolios? I am familiar with high yeild arb, saftey netting, etc. What are your thoughts on the subject?

Most of the things that can be applied to bonds can also be used for Par prefereds as well.

DPM

spncr2 · #2 (**permalink**) 12-10-05, 07:15 PM

High yield bonds, bond funds? I have taken a little interest in them. Not much though.

All the best,

WallStGolfer31 · #3 (**permalink**) 12-11-05, 04:16 AM

Quote:

Originally Posted by FirstConsul

I.e. Junk bonds

Like GM bonds(currently 11% yield ) or Ford Bonds

yeah lol, Level 3 were at about 17% last time I saw them, which was quite some time ago.

Stocktrading101 · #4 (**permalink**) 12-11-05, 01:34 PM

You usually will hear about some major investors buying tons of junk bonds and making a killing on them later on. I have always been curious as to how they operate and mature though since the company is usually in some trouble. Does anyone have any good links on these?

WallStGolfer31 · #5 (**permalink**) 12-11-05, 04:40 PM

Quote:

Originally Posted by Stocktrading101

You usually will hear about some major investors buying tons of junk bonds and making a killing on them later on. I have always been curious as to how they operate and mature though since the company is usually in some trouble. Does anyone have any good links on these?

Personally I've found much more helpfull, in depth information in books rather than web pages. Investopedia has some articles on the subject but it's old information to me. I was at the point where I was about at an intermediate a few semesters ago, stuck in the middle, buying some advanced books on the subject, but couldn't understand the higher level math behind the explanations. Now that I have taken a few more classes, I can do the Calculus and Statistics needed to understand the higher level theroies involved.

psykiv · #6 (**permalink**) 12-12-05, 06:46 AM

Ive looked at and seriously considered bonds.

The only bonds I would consider are ones rated BBB or above.

There are a few bonds rated BBB and above that are currently yielding 9%+ and don't have expiration dates that far away (as in, within 2 years).

Maybe I should transfer some money from my savings and into those bonds. BBB is the lowest rating most people would consider to still be investment grade.

WallStGolfer31 · #7 (**permalink**) 12-12-05, 02:55 PM

Quote:

Originally Posted by psykiv

Ive looked at and seriously considered bonds.

The only bonds I would consider are ones rated BBB or above.

There are a few bonds rated BBB and above that are currently yielding 9%+ and don't have expiration dates that far away (as in, within 2 years).

Maybe I should transfer some money from my savings and into those bonds. BBB is the lowest rating most people would consider to still be investment grade.

haha DONT put your SAVINGS in BBB bonds. I Bonds are great for savings, you can get them at any bank, they are backed by the US gov. so they are practically risk free, and right now they are yielding 6.7% well above the 10 year treasury, and you can cash them in any time after 1 year of purchase w/ a 4 month interest penelty, after 5 years, no interest penelty. That's just my opinion though, take it as it is.

Matt Moss · #8 (**permalink**) 12-12-05, 06:16 PM

Bonds consist of different layers of interest, a %-age boost for every level of risk you take on. Junk bonds are those issued by companies in poor financial condition, and thus have a large Default Risk Premium. I'd imagine if you did your homework well enough to find a few really undervalued companies, of whom you could be reasonably sure wouldn't default on the bonds you could make a killing.

Still I'm not sold on bonds. Perhaps if I had a ton of capital to invest, I'd consider throwing some money into bonds. However for my personal finances, they simply provide too low a return on average.