Any thoughts our there on this JNK for total return in 2010? I was thinking yields on this thing could tighten up another 150 bps or or more. This would (just kind of eye balling it) lead to the JNK perhaps moving up 13-18%% or so plus picking up the 12% yield or so...of course exiting 2010 it will only be yielding 10% or so...so total return will be 25-30%? I think this will beat the S&P 500.
comments please? this sounds too easy even if the stock market is punk we will get our 12% yield....so I am using this over buying equities...good upside with downside protection and income.
We will see per share price of 40 before end of the month.That said, Monthly divi hard enough to predict without guessing/estimating 12 divi's out. I am thinking 12% total for 12 monthes going forward, anything more is a bonus.
I think you might be too optimistic. If the economy doesn't really grow much in 2010, you would probably be looking at a fairly flat price of JNK. Total return would essentially be the yield of 10 - 11%. I still think that will beat equities and JNK is a lot safer than equities. I like junk bonds as an asset class.