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The default rate and other fundamentals aren't painting a pretty story. Was unable to post a chart, but the proxy index for junk bonds has been making lower highs and lower lows for the past month.
Edit: Since investing is often counterintuitive, with the bleak price action and bleak fundamentals, maybe now is the time to buy junk bond funds. However, will leave that to the bottom pickers for now.
I don't have any junk bond funds because of the recent price action. And junk bond funds could well be on their way to only their fourth negative year (1994, 2000, 2008) since the Michael Milken fiasco in 1989/90. I would love to see a mini crash in this sector. But Josh Brown is really stretching it by invoking Jeff Gundlach (saying Mr Gundlach believes junk bonds could be the next big blowup) in his commentary on the imminent demise of junk bonds. Just last week Mr Gundlach was on CNBC saying he believes junk bonds are a **good** investment bet in 2015. He believes any debacle is a long ways off like 3 to 4 years down the road.
Comments
I'm still in high yield munis - they took a hit but are on the way back now.
It seems like the funds that hold higher quality stuff are still hanging in there, but the more aggressive funds aren't looking great on charts.
Corp junk (PRHYX) did not confirm the recent NASDAQ peaks:
http://thereformedbroker.com/2015/07/22/the-next-big-short/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed:+thereformedbroker+(http://thereformedbroker.com/feed)
http://www.bloomberg.com/news/articles/2015-07-15/gundlach-says-junk-bonds-will-be-debacle-in-3-to-4-years