Junk Bonds
Junk bonds are typically issued by companies that are either
in trouble and need to raise cash or by companies that just
want to raise cash without having to sell more shares of stock.
As a result, they have a low rating and are considered high-risk
investments.
Because they are high risk, junk bonds generally offer higher
yields than other bonds to compensate for the additional risk.
A safer way to invest in junk bonds is through a junk bond
mutual fund. At least then you’re assured of a diversified
portfolio that spreads your risk across various companies.
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