These sort of financial experts/fools have been formally educated to believe that redistributing wealth from the poor and middle class to the rich is fiscally sound and wise. Junk bonds are most lucrative to the bankers who collect fees from them. They are a variation on the CDOs [Collaterialized Debt Obligations] which caused the airlift of multi-trillion dollars from the US taxpayer to investment bankers - a critical fact conveniently left out of this video. Caveat emptor.
i was thinking of putting money into etf symbol JNK. It pays a high dividend. Judging from its name however, its probably a junk bond etf. What do you think? Wise idea or am I a fool.
@orangedac Don't forget although they are called junk bonds, bonds in general are senior to stocks, so they are lower risk. Putting some of your money say in JNK is not a bad idea, only as soon as interest rates start to rise the fund is going to fall sharply. Thats just my opinion though.
but is it possible that these companies only issue junk bonds and have no stock ? in that case, the first one to get wiped out in any financial mishap would be the junk bond holder.
@orangedac You can only issue debt/sell bonds if you have equity is it available to the public or not doesn't really matter. You should not worry about, say, single company defaulting if the fund invests in some ~400 different companies then if some of them default your returns overall wont get hammered down a lot. Also I read that on average you get 44% of your investment back from a defaulted issuer, so all in all i would presume junk bonds not to be a bad investment.
He's cute
Oneworld87 4 months ago
These sort of financial experts/fools have been formally educated to believe that redistributing wealth from the poor and middle class to the rich is fiscally sound and wise. Junk bonds are most lucrative to the bankers who collect fees from them. They are a variation on the CDOs [Collaterialized Debt Obligations] which caused the airlift of multi-trillion dollars from the US taxpayer to investment bankers - a critical fact conveniently left out of this video. Caveat emptor.
istlota 1 year ago
@istlota
i was thinking of putting money into etf symbol JNK. It pays a high dividend. Judging from its name however, its probably a junk bond etf. What do you think? Wise idea or am I a fool.
orangedac 1 year ago
@orangedac Don't forget although they are called junk bonds, bonds in general are senior to stocks, so they are lower risk. Putting some of your money say in JNK is not a bad idea, only as soon as interest rates start to rise the fund is going to fall sharply. Thats just my opinion though.
SonicYouthXXX 1 year ago
@SonicYouthXXX
but is it possible that these companies only issue junk bonds and have no stock ? in that case, the first one to get wiped out in any financial mishap would be the junk bond holder.
orangedac 1 year ago
@orangedac You can only issue debt/sell bonds if you have equity is it available to the public or not doesn't really matter. You should not worry about, say, single company defaulting if the fund invests in some ~400 different companies then if some of them default your returns overall wont get hammered down a lot. Also I read that on average you get 44% of your investment back from a defaulted issuer, so all in all i would presume junk bonds not to be a bad investment.
SonicYouthXXX 1 year ago
U.S bonds = Junk Bonds.
US will pay with worthless, devalued, inflated paper dollars, or default on its debt.
Lucky7wins 1 year ago