Ezra Holdings files for U.S. bankruptcy
Another bond issuer (Ezra) had declared default last Saturday.
Link: mobile.reuters.com/article/idUSKBN16P0PT
We had written an article "Are high yield bonds worth the risk?" Our answer is No.
myasiaprivatebank.blogspot.sg/2017/02/are-high-yield-bonds-worth-risk.html
We usually only invest in investment grade bonds.
Investment grade bond's yield are lower and maturity are longer when compared to high yield bonds. But investors have higher chance to get back their principal at maturity.
By building leverage bond portfolio, investors can get almost the same yield as high yield bonds.
See: myasiaprivatebank.blogspot.sg/2016/12/bond-portfolio-leverage-ytm-at-897.html
We rather take risk on duration than take risk on issuer.
Duration risk will only result in mark to market losses. But issuer risk can result in permanent loss of capital.
Link: mobile.reuters.com/article/idUSKBN16P0PT
We had written an article "Are high yield bonds worth the risk?" Our answer is No.
myasiaprivatebank.blogspot.sg/2017/02/are-high-yield-bonds-worth-risk.html
We usually only invest in investment grade bonds.
Investment grade bond's yield are lower and maturity are longer when compared to high yield bonds. But investors have higher chance to get back their principal at maturity.
By building leverage bond portfolio, investors can get almost the same yield as high yield bonds.
See: myasiaprivatebank.blogspot.sg/2016/12/bond-portfolio-leverage-ytm-at-897.html
We rather take risk on duration than take risk on issuer.
Duration risk will only result in mark to market losses. But issuer risk can result in permanent loss of capital.
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