Have anyone heard of high yield bonds? Do u know what are the return for these kind of bonds?

Question

i noticed from a GEindex site that they are involved in high yield bonds. GEindex pays rates of 2% pre day to investors. If they can pay such high premium I just wonder how much they make by dealing in high yield bonds?

Answer 1

You should double check that 2% per day return figure- that sort of return compounded daily is simply not feasible.

High yield bonds are also referred to as "junk bonds". These are bonds issued at a higher credit risk and possibility of default. The funds pay out a higher return to compensate investors for the increased risk.

High yield bonds typically return about an 8% total return annually, go to Morningstar.com for historical rates of return on high yield bond mutual funds. Use the "Fund Screener", which is one of the free services available at the site.

While you may be able to secure a higher return on an individual bond, the default risk would be very high. The higher the rate of return paid by the bond, the higher the risk that the company will default and that you'd lose your money. You're better off spreading the risk among many bonds in a mutual fund.

One thing to watch with any bond investment is interest rate risk. Bond values tend to go in the opposite direction of interest rates. As interest rates go up, the value of high yield bonds tends to go down (there's been a decrease in the premium or spread between the high yield bond's rate of return and the rate of return available in safer bond investments). Also, as interest rates go up, firms issuing high yield bonds have more difficulty borrowing money, so are at greater risk of failure and default.

Answer 2

severe-yield bond is the well mannered term for "junk bond". they have a some distance better yield because of the fact they're lots riskier than a typical bond. lots larger default fee. Yields tend to be 2-5% larger than widely used bonds - that 2-5% larger on a each and every year foundation. No bond will pay 2% consistent with day. in the event that they did, we would all be wealthy.

Answer 3

"Banks may try to mask their inflationary policies but gold always cuts through." Gold always "cuts through" --- cuts through what? A "real" investment site would not use this phrase.

...enables grater profits.GEindex... misspelling of "greater" No space between profits. (end of sentence) and GEindex (start of new sentence). Do you find mistakes like this in a real pro investment web site like T. Rowe Price or Vanguard's? Nope.

The above plus the part of the site which encourages an investor to "sponsor" others to earn lots more money, one can earn extra from 4 levels of "downloads" shows to me this might be just like those very old pointed rock structures in Egypt -- pyramid scheme.
Yields from high-yield bonds are usually in the 8% to 15% per year range.