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buy or sell high yield dividend bond stocks
Posted on 4/14/21 at 12:43 pm
Posted on 4/14/21 at 12:43 pm
would you buy or sell high yield dividend bond stocks right now?
most of them have increased in price over the last 6 months on average by 30% and some by as much as 60%
just thinking with biden in control shouldnt this market be crashing as they continue spending trillions like crazy and with massive tax hikes imminent, shouldnt they be soon to have a massive sell off?
most of them have increased in price over the last 6 months on average by 30% and some by as much as 60%
just thinking with biden in control shouldnt this market be crashing as they continue spending trillions like crazy and with massive tax hikes imminent, shouldnt they be soon to have a massive sell off?
This post was edited on 4/14/21 at 12:45 pm
5
Posted on 4/14/21 at 5:49 pm to keakar
quote:
high yield dividend bond stocks
Don't know what you are referring to here.
Posted on 4/14/21 at 5:51 pm to keakar
Yes
Posted on 4/14/21 at 6:49 pm to keakar
quote:
bond stocks
Is this like Dogecoin?
Posted on 4/15/21 at 5:59 am to keakar
VYM
Posted on 4/16/21 at 7:16 am to keakar
Do your own homework before taking my advice but this is what I have always been told.
In a rising interest rate environment buy financials and sell bonds. A lot of people are buying financials now because they think rates are going up soon.
In an environment where rates are decreasing...buy bonds.
Bonds did well last year because rates decreased.
In a rising interest rate environment buy financials and sell bonds. A lot of people are buying financials now because they think rates are going up soon.
In an environment where rates are decreasing...buy bonds.
Bonds did well last year because rates decreased.
Posted on 4/16/21 at 11:32 am to frogtown
quote:
Do your own homework before taking my advice but this is what I have always been told.
In a rising interest rate environment buy financials and sell bonds. A lot of people are buying financials now because they think rates are going up soon.
In an environment where rates are decreasing...buy bonds.
Bonds did well last year because rates decreased.
thanks, this was pretty much what i felt as well but yet they keep going up despite the huge tax hikes and impending recession there are setting up to destroy the economy.
i have a high yield bond stock paying 11% dividend thats increased in value by 32% and a 14% dividend high yield bond stock i bought at $5 and now its at $8 for over 60% increase in value so im thinking i better sell and get the hell out before the crash but im not sure what to do with the cash if i do sell (and no im not thinking of investing in any hookers and blow lol)
This post was edited on 4/16/21 at 11:35 am
Posted on 4/16/21 at 3:13 pm to keakar
Please explain what a high yield bond stock is
Posted on 4/16/21 at 4:16 pm to iAmBatman
they are dividend paying stocks that mainly invest in high risk debt so they take more risk and by default pay higher dividends
they average anywhere from 5% to as much as 15% yields based on the level of risk they take
the basic idea is for the bond fund managers to win more then they lose when buying high risk debts in corporate and municipal bonds so if some default and go under, you still make enough on the others to absorb any losses while still getting a nice return to pay the dividends
i generally only buy those paying over 7% to make it worth the risk and less then 15% to avoid the most risky ones. then i track them to be sure they have a long record of not cutting the dividend and the stock price doesnt fluctuate wildly so i know when i sell its not going to be far away from the original purchase price. finally i only buy the ones with average trade 100k shares each day so when i sell it wont be an issue like with some seldom traded stocks that only trade 50k or less shares each day might
here are a few examples of them:
EPS
GLAD
ETJ
CHW
IGD
NCV
AWP
MMT
NRO
they average anywhere from 5% to as much as 15% yields based on the level of risk they take
the basic idea is for the bond fund managers to win more then they lose when buying high risk debts in corporate and municipal bonds so if some default and go under, you still make enough on the others to absorb any losses while still getting a nice return to pay the dividends
i generally only buy those paying over 7% to make it worth the risk and less then 15% to avoid the most risky ones. then i track them to be sure they have a long record of not cutting the dividend and the stock price doesnt fluctuate wildly so i know when i sell its not going to be far away from the original purchase price. finally i only buy the ones with average trade 100k shares each day so when i sell it wont be an issue like with some seldom traded stocks that only trade 50k or less shares each day might
here are a few examples of them:
EPS
GLAD
ETJ
CHW
IGD
NCV
AWP
MMT
NRO
This post was edited on 4/16/21 at 4:25 pm
Posted on 4/16/21 at 4:44 pm to keakar
You’re talking about business development companies, or BDCs.
They’re not nearly as tied to interest rates a bond fund would typically be. Their high yields and primarily debt investments mean some sensitivity, but the below investment grade nature of their investments often means they’re more sensitive to underlying economic growth. If debtors can pay their bills more comfortably, it means the risk of the BDC is lower and you may see capital appreciation in the stock even if rates go higher.
BDCs are far more correlated to equity prices than they are bonds.
They’re not nearly as tied to interest rates a bond fund would typically be. Their high yields and primarily debt investments mean some sensitivity, but the below investment grade nature of their investments often means they’re more sensitive to underlying economic growth. If debtors can pay their bills more comfortably, it means the risk of the BDC is lower and you may see capital appreciation in the stock even if rates go higher.
BDCs are far more correlated to equity prices than they are bonds.
Posted on 4/16/21 at 4:59 pm to slackster
BDCs make very little sense to me for any worthwhile amount of money. For example, BIZD is a BDC ETF. A 50/50 investment in VTI/BND that’s rebalanced every month would have provided 7% better annualized returns with slightly more than half the risk of BIZD.
If you hopped on a couple at the peak of the pandemic, congrats, but you’d have been better off just buying the Russell 2000 if you want that small company exposure at the beginning of an economic expansion. Idk, I just have a difficult time finding a reasonable place for them in a portfolio.
If you hopped on a couple at the peak of the pandemic, congrats, but you’d have been better off just buying the Russell 2000 if you want that small company exposure at the beginning of an economic expansion. Idk, I just have a difficult time finding a reasonable place for them in a portfolio.
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