Risky Can Be Safer Than Risk-Free
Perhaps the greatest of all the financial myths out there is that investing in U.S. Treasuries is a risk-free endeavor… The truth is that a U.S. Treasury security with a 10-year maturity is anything but risk-free.
bonds
A Possible Misery Index Renaissance
If the supply of distressed bonds increases, the prices of distressed bonds will likely decline. This suggests some bargains will become available for discerning, patient investors. We’ll be carefully looking over the distressed merchandise to generate profitable recommendations.
What Bonds Do When No One Is Watching
Stocks dropped 10% over a four-week period in February and March. As is usually the case, the performance of bonds didn’t capture quite as many headlines. But their behavior as equities sank is worth examining – especially by investors who don’t know about the benefits of distressed bonds.
A Possible Turning Point For Distressed Debt
Tight credit isn’t the only factor driving the Distress Ratio’s rise and fall. But it’s a powerful one that’s likely to keep making it harder for struggling companies to refinance their maturing debt in coming months. It all adds up to a likelihood that distressed-debt investors will have a significantly wider array of bonds to choose from before very long.
A New Burst Of Life
This nutrition company was the focus of an epic battle of two investment titans. Since that dispute ended, shares have been up and down – now creating an opportunity to buy the company’s bond at a very large discount.
Distressed Bonds Outpaced S&P 500 In 2024
The total return of the average distressed bond exceeded 30% in 2024, beating the S&P 500 Index’s total return, which was well above its own historical average, at 25%. Still, with many big losers in that average, picking the right bonds is essential with distressed investing.
A Nail-Biting Sequel
High-yield bonds often predict the direction of their companies’ associated stocks a few months in advance. We’ve taken advantage of this phenomenon with three bond recommendations followed by the same companies’ shares. And in this issue, we’re doing the same thing…
Rising From The Ashes
First a supply-chain bottleneck, then a warehouse fire, sent this hugely popular, non-brick-and-mortar company’s revenue plunging. It has fought its way back and now finds itself on solid ground once again.
Distressed Bonds Go Their Own Way; Plus a Sell
When interest rates go up, bond prices go down. Most segments obey that rule, by falling in price, as the benchmark 10-year Treasury yield rose. But not distressed bonds.
Be Careful of Averages When It Comes to Distressed Debt
When investing in distressed debt, be very selective about which distressed bonds you buy. Buying a market basket of assets – a quick, efficient way of adding to equity holdings – is not a smart alternative with distressed debt.