Do High Yield bonds belong in your Roth IRA? Well, if you’ve been following the channel you know how I feel about bonds. Not a fan.
But High Yield bonds are different. They pay more. Well, there is a reason they pay more…. they are riskier. In fact, look at 2007-2009 many high yield funds were down over 40%.
In this video I am going to share with you why I think if you are going to take the risk to invest in high yield bonds, you may as well just go into stocks. Stocks have performed well ahead of high yield bonds, with a similar risk. Risk being defined as price swings of the portfolio.
In fact, I will show you exactly how bonds work too, in terms of your returns. One thing you have to understand is there is NO capital appreciation in bonds. None.
If you get capital appreciation today, it means capital depreciation MUST happen. It’s pure, basic mathematics.
Watch as I show you exactly what I mean.