“For near-term boost, go with high-yield fixed income”
By Jeff Benjamin
Excerpt: “Yes, high yield is attractive right now, but there are also significant risks when your starting point is low interest rates and narrow spreads,” said Steve Blumenthal, chief executive of CMG Capital Management Group Inc., a firm that helps advisers manage bond portfolios.
The average junk bond yield is hovering around 6%, which is only 350 basis points higher than the yield on the 10-year Treasury bond.
That spread compares with a historical average of 500 basis points, which should remind investors of the potential for radical yield adjustments.
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