stock and bonds
An excerpt of an article about stock and bonds
The great thing today is the easy availability of research. So it means you do not really have to waste a lot of your time on gathering that. You could also get a rating for the bond from Moody’s or Standard & Poor’s and they have various standards: AAA/Aaa, AA/Aa, A/A, BBB/Baa), etc.
It really is like you were buying stocks. You need to do a lot of research about the company, its financial status, etc. There are so many sites on the Internet where you could find a lot of helpful information. This could take time but you could find people who are objective and experienced to advise you.
What are the success rates and the failure rates? Well, in the early 90s, the lower rated bonds reaped high 34.5% average returns. This was followed the next year with junk bonds giving better returns. Is this relevant today? It is, because out of the total issues, high yield bonds were a third. In fact these returns look like they are competing with the returns stocks aim for.
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