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Vanguard High-Yield Corporate Message Board

  • derrillp derrillp May 12, 2009 7:55 PM Flag


    Weakness in junk seems to be occurring. Are the bears trying to create worry with their talk about defaults? Seems like just another scare tactic to bring down the prices and up the yields. Any comments?

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    • It's been a historic run so some give back is to be expected. VWEHX has held up better the past two days than most of the other open end junk funds. In 2003 amid an almost similar run junk bond funds had a 4% correction. In 1991 which comes closest to the current run the correction never amounted to more than 1 and 1/2%. The key is now the stock market. If the market has a bad spell like it did earlier in the year junk could decline 4% to 6% from here. Of course, just my opinions as no one, not even the so-called experts have much of a clue.

      • 1 Reply to niterunner_2000
      • There's still 3 hours left but stocks aren't looking very good today. The junk bond ETFs such as HYG, JNK, and PHB aren't doing as bad as I would have expected. A lot of junk funds hold MGM debt and that issue is soaring today. I am still a big fan of junk but I don't want to get caught holding such a large position in case I am wrong so will sell around 25% of my position at close today. I sold a miniscule amount yesterday so after today it will leave me with 66% of my capital in junk bonds. Will sell more tomorrow if we keep going down because I don't enjoy watching my profits erode. Good luck longs.

5.68-0.01(-0.18%)May 27 6:45 PMEDT