GlobalTrekker

High Yield Investments in a Crummy Economic Environment

Uhm, I don't mean to be disrespectful, but isn't it a little worrisome to take too close to heart subjective data-analysis from someone who owns PMF and HYG? PMF is trading at a +30% premium and leveraged 46%; in other words you own $9.90 worth of bonds for the $13.13 the fund costs, plus you own them with borrowed money. That's absolutely crazy. Probably the only thing supporting that fund's price is a short squeeze. Once the squeeze is over, this dog will crash. HYG is not as bad, but still...sheesh, trades at a premium, a pretty hefty fee structure for a bond ETF, an unsustainable 10.4% yield, and crappy casino debt and the like, all about to implode. I see this falling the same percentage as its dividend is going to fall, about 12%. I wouldn't buy junk now, and I'd trade my PMF in for KTF -- superior fund on every level.