High-yield bonds, also known as junk bonds, are corporate bonds that offer a higher yield than investment-grade bonds but come with higher risks. When investing in high-yield bonds, it's important to conduct thorough research and analysis to find businesses with sound financials that are likely to pay their debts on time. Your assets should be spread across a variety of industries and issuers to reduce risk. For investors who lack the time or ability to analyze individual bonds, high-yield bond funds can be a useful alternative. When making an investment in high-yield bonds, just as with any other investment, it's critical to understand the dangers and potential returns.
How to invest in high-yield bonds
- Thread starter Johnson2468
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Investing in high-yield bonds can indeed offer the potential for higher returns than investment-grade bonds, but it's important to understand the risks involved.
High-yield bonds, also known as junk bonds, are issued by companies with lower credit ratings and are therefore considered to be higher risk. The higher yields offered by these bonds are intended to compensate investors for taking on this additional risk.
