News Flash - Financial Advisers Upbeat On Junk Bond 11% Return
April 28, 2003
After a five-year slump that lasted through last October, junk bonds have been on a tear over the past six months. "Technically, people would say after such a long run, there is bound to be a pullback," said Erika Safran, a financial planner with Financial Asset Management Corp. "But there are few other investment vehicles out there that provide this kind of yield right now. Over the long term, people are not buying equities," she said. One of the biggest draws to high-yield bonds is their spread over treasuries. While the average yield on junk bonds has fallen since the beginning of the year, it's still high. With the 10-year Treasury yielding about 4%, junk bonds can pay as much as 11%.
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