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Vanguard High-Yield Corporate Message Board

  • buy4long buy4long Feb 11, 2009 11:49 AM Flag

    Questions for the board

    Junk bonds/junk bond funds have been doing well over the past two months. Please comment on my reasoning below-correct, off the mark, missing something? Thanks.

    (1) Risk of default of existing bonds is decreasing, as companies can refinance debt with lower interest rate money. The Fed's near-zero interest rate is key here.

    (2) Bond rally should lead stock market rally. As such, maybe I should think about returning to a stock mutual fund.


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    • Would tend to agree with "therightstuff" although not quite so vociferously. I would not yet get into any stock funds although judicious short term trading of solid stocks that pay dividends seems reasonable(the more the volatility the better the opportunity). However buying a stock fund is the ultimate buy and hold and I fear we are in for more bad news and would wait at least another full quarter. At least that's what I'm doing. I have bought a small postion in BAC and GE but intend to trade at first oportunity. I also have some PTTRX but that is because its one of the limited options within my 401k plan. Y'all might want to look at NRF-PB and NRF-PA or the NRF common. Looks a lot riskier than it is. Make sure to do your own DD.Good luck longs.


    • This should be a good year for bonds maybe the last quarter for stocks......betwween now and then....value funds should be a strong buy.

    • Keep out of the stocks. You can't make any money in them unless you are a day trader. Junk bonds offer consistent yield despite all the talk about defaults (it won't happen). Buy junk now and you will get a nice 9.45% return plus there is going to be huge upside appreciation in the nav over the next year!!!!

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