High Yield Corporate Bonds

There’s no getting around it: high yield corporate bonds are not for everyone. Yet for the investor who doesn’t mind taking a risk with his or her portfolio, a high yield bond can provide quite the return. But how does an investor decide to take a chance on high yield bonds? As with so many things in life, knowledge is key. Realizing the risk involved won’t diminish it, but learning about the potential pitfalls as well as benefits of high yield bonds will help make for a well-educated decision.

Obviously the lower a corporate bond is rated the higher its yield. A high yield bond will really pay off for an investor if a credit rating agency upgrades the debt associated with the bond. On the flip side, though, there is higher risk which is all but non-existent with municipal bonds. High yield corporate bonds are also more prone to fluctuations depending on the economy in general (a recession may lower the prices of high yield bonds) as well as negative news about the issuer and the issuer’s financial condition.

Call us at 800-223-3881 or email us at info@stoeverglass.com to ask for one of Stoever’s representatives to learn more about the pros and cons of high yield bonds and how to get the best results with them.

Click here to learn about risk factors.

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