Following to my last year's post regarding:
Best strategy If you hate fluctuations and want to invest in long term products like Corporate/Foreign Bonds 6-17-2012
We summarize how Dow Jones/SPX/US Indices can affect our High Yield funds.
In typical bull markets, Equity always beat up any investments around the globe, but when sideways market, these high paying dividend funds may be the best investment you may have.
In bear markets, these funds dip as well, usually less compared to equities, still you get dividend payouts monthly. Where you could just add up fresh funds in dips, making your Yield% higher.
Junk bonds do have risk also, they're main issue is a "default", (Defaulting on a debt obligation can place a company or individual in financial trouble. The lender will see a default as a sign that the borrower is not likely to make future payments. For example, if Company XYZ is unable to make a coupon payment on its bonds, the bondholders would place XYZ in bankruptcy. This would give the company an opportunity to claim XYZ's assets as a form of repayment for the debt.)
Diversify your money according to your risk level, and these investments are to those who want small to medium risk, but higher return.
Please revisit my old post below to know how to invest in Corporate/Foreign/High Yield Bonds.
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