Junk Bonds or High yield Debt   What are They  & Are they a Good Investment
Channel: GeoStar TV
Date: 2020-04-09

What are The Junk Bonds ? & Are they a Good Investment ? -- Economic Collapse -- Stock Market Crash
Junk! Not a nice word. And when it comes to bonds, not a particularly accurate word, either. Junk is something useless, right? Something you want to toss in the trash? Well, "junk" bonds are definitely not useless. In fact they're extremely useful. Sometimes.
So are junk bonds for you? In this video, we'll explore this underdog of the investment world and its turbulent history. 
We'll also learn why some bonds are dubbed junk and whether you should devote a portion of your financial portfolio to them. 


Welcome to The Atlantis Report. 

A junk bond is exactly the same as a regular bond. Junk bonds are an IOU from a corporation or organization or country that states the amount it will pay you back called the principal, the date it will pay you back known as the maturity date and the interest it will pay you on the borrowed money. Junk bonds differ because of their issuers' credit quality. All bonds are characterized according to this credit quality and therefore fall into one of two bond categories, investment grade, and junk. These are the bonds that pay high yield to bondholders because the borrowers don't have any other option. Their credit ratings are less than pristine, making it difficult for them to acquire capital at an inexpensive cost. Junk bonds are typically rated 'BB' or lower by Standard & Poor's and 'B A' or lower by Moody's. Junk bonds are risky investments but have speculative appeal because they offer much higher yields than safer bonds. Companies that issue junk bonds typically have less-than-stellar credit ratings, and investors demand these higher yields as compensation for the risk of investing in them. A junk bond issued from a company that manages to turn its performance around for the better and has its credit rating upgraded will generally have a substantial price appreciation.


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