For example, it does not include euro bonds («reverse Yankees») that are hot in Europe,
where junk bond yields are at a ludicrously low 2.35 % on average, and the high - grade yield is just above zero.
Not exact matches
For example, in a world
where short - term interest rates are zero, Wall Street acts as if a 2 % dividend
yield on equities, or a 5 %
junk bond yield is enough to make these securities appropriate even for investors with short horizons, not factoring in any compensation for risk or likely capital losses.
4) One example of that is the
junk bond market,
where the average
yield is now over 20 %.
When you have many different parties going into the markets seeking income, not caring
where they get it from, and a shock hits one part of the market, the effect flows to other areas If all of a sudden
yields on
junk bonds look cheaper, the
yield trade - offs of buying
junk and selling dividend paying common stocks looks attractive.