Junk bonds, also known as high-yield bonds, sound like a great idea when the economy is in decent shape. Yet, throw in low oil prices, a falling stock market and some dubious employment data, and suddenly those junk bonds begin falling in price. That’s because junk bonds are bonds whose underlying issuers are in the weakest financial shape, thus they’re least able to handle any kind of cash flow stress. Right now, we’re seeing energy sector junk bonds get hit the most, especially those involving fracking.
As oil prices fall, frackers can’t as much money for the oil they produce, which means less cash flow and trouble making bond payments. So while some junk bond exchange-traded funds are down 20%, you may want to look for more stable places for high yields, and that means preferred stock. Preferred Stocks to Buy: Ashford Hospitality Trust, Inc. (AHT-D), Public Storage (PSA) and Texas Capital Bancshares Inc (TCBIP).
Source: InvestorPlace
Related Articles:
- 5 Dividend Stocks In Need Of A Market Correction
- 10 Dividend Stocks Building A Growing Cash Stream
- How To Build A Sustainable High Yield Portfolio
- How To Buy Dividend Stocks At The Bottom
- 10 Stocks That Have Paid Dividends Since The 1800s
3 Preferred Stocks to Buy Instead of Junk Bonds
Posted by D4L | Thursday, March 17, 2016 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
~
Popular Posts Last 30 Days
-
In an attempt to put a lid on inflation, the Federal Reserve has stated that it intends to raise its benchmark federal-funds rate by 0.25% a...
-
If you have contemplated selling shares of some of the companies you own this year, you likely aren't alone. Considering how volatile th...
-
Dividend Kings, stocks with at least 50 consecutive years of dividend growth, are favorites of many income investors. High-dividend yields c...
-
Dividend growth stocks are among our favorite investment groups because you get so much bang for your buck. Not only do the companies pay di...
-
Readers may want to do a stock valuation on the stocks in their favorite sectors and wait patiently until they become cheap. Patience is a v...
-
This is a clear recipe for investors to follow, and will lead us quite naturally to two recent stock recommendations from Morgan Stanley’s a...
-
Dividend utility stocks might seem bad for your portfolio during high inflation and rising interest rates. However, the sector has done well...
-
Companies that have either been through past downturns or have the pricing power to offset the costs of inflation provide a crucial element ...
-
Dividend reinvestment plans, or DRIPs, can be effective ways to accumulate shares of high-quality companies for those with limited capital t...
-
Do you have the stomach for contrarian investing - betting against the crowd? Sometimes that's necessary in order to find value. Why buy...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.