CloroxCowboy

Stocks vs. Bonds: An Update for the Current Market

Short WFC,


The article you pasted in takes a pretty narrow view and ignores the possibilities that exist with the current yields. Being a young investor, I'm buying these steadily on the way down, reaping increasingly more pleasing payments along the way. I also have the luxury of a long horizon to let prices bottom out whenever they choose and sell at a profit later. I realize that not everyone has time on their side, but those people shouldn't be involved in junk funds for that very reason.

Can You Trust 'Junk'-Bond ETFs?

This article takes a dangerously narrow view and ignores the possibilities that exist with the current yields. Being a young investor, I'm buying these steadily on the way down, reaping increasingly more pleasing payments along the way. I also have the luxury of a long horizon to let prices bottom out whenever they choose and sell at a profit later. I realize that not everyone has time on their side, but those people shouldn't be involved in junk funds for that very reason.

Take a Look at Junk - Barron's

Hiyield007, thanks for the response. I agree with your idea that these are slow to rebound, and for someone with better timing skills I say wait it out. I'm sure they will get a bit cheaper, however I don't have the best record when it comes to calling bottoms and usually tend to do better scaling in slowly. I should have made it clear that this is a personal tactic for me. I do think that flatter times are ahead, and the spread over Treasury is still attractive enough to make me risk being wrong about that. I'm comfortable holding my position for as long as I'm collecting a decent yield (or a great one if defaults don't get crazy), until I can sell for a price appreciation.

If not Vanguard, what is your OE fund of choice? I definitely plan to diversify on this move.

Take a Look at Junk - Barron's

I am considering lightly purchasing a few of these...for someone like myself with a very (very) long term view they should work out well. As I'm not expecting full-blown depression (or the associated default levels) these yields are attractive enough that I don't care about calling the bottom precisely. With a play that I believe will be viewed as a steal several years from now, it's better to load up slowly on the way down than worry about timing and possibly miss a decent entry.