HY

dieselbp67

I would put 25k into spx etf, 10k into a us smid vehicle, 5k into eafe, 5k into short duration HY, 5k into bank loan ETF

Gorgenapper

Just watched some channel where a British chef spent 5 hours to cook up a pub burger that [looked nothing like a burger](https://m.youtube.com/watch?v=7pIWhvXi_HY), just piled up 15" high like a giant 🍆 it looked like you were supposed to start deep throating it. Puts on the UK

meeyamee22

3x net leverage is exceptionally manageable for a defensive company with Netflix’s cash flow. They will likely retain single-A credit ratings that are 4 notches above HY territory. The debt is going to be quite cheap to the company - meaning it won’t offer lenders a ton of spread. Google’s most recent 30 year bond is only 5.45% at approximately 75bps of spread. Netflix will likely only offer around 90-95bps, if that’s any indication of how strong of a credit profile they have.

FewNegotiation1101

Agreed but markets can stay irrational longer than a trader can stay solvent. There is the option to not play but odds can shift against speculation depending on the money markets i.e. gov bond yields and credit spreads within IG and HY.

Sea-Being56

I work in private credit and used to work in high yield. No way 100% cov lite HY stronger (fundamentally) than UMM vanilla PC. Sure, there are pockets of PC that are garbage, but most of those areas aren't mainstream.

Spedicey007

BLNE 

Hot-Fox-8797

We’re so big that the asset allocation stays pretty stable. Exception being growing asset classes growing like private credit etc. But high level stock vs bond pretty stable. I think hy bonds look good compared to stocks currently when looking at HY bonds YTW vs a lot of stocks FCF yields

Actual-Ad-7852

You’re participating in the stock market. Never stupid to pull out funds and have some dry powder when you feel it’s necessary. You’re incurring the taxable event at the end of the day, so critics of your decision can go kick rocks. With that being said, I disagree with the timing. Think we’re still relatively early in the AI super cycle. Ppl comparing this to dotcom are casuals. Valuations healthier, less aggregate leverage, clear signs of infrastructural buildout, and unprecedented institutional and consumer adoption. David Sacks said it best: you can’t be simultaneously afraid of an AI bubble and believe that it wil quickly force a labor market regime shift from efficiency gains - the two are mutually exclusive. I believe the latter, not the former. Where I would advise you against your initial strategy is your plan with the dry powder. HY/Bonds at 25? You’ve had a nice run, but I think that’s a bit conservative at your age. Also, even if we crash 30%+… name a more investable theme than AI in the intermediate/long-term. You may have some of these application software names go to zero and overstated future earning potential realized over time. But NVDA, AVGO, GOOG, META, TSM - all fundamental players of AI value chains with fairly competitive moats. Indicators of overbought conditions are a relative measure (we’ve never seen a market or theme like this). AI, in my view, is a Renaissance, not some fad that helps you write papers and book meetings. It will quite literally revolutionize societal behavior to accelerate scientific, sociocultural, and existential pursuits. Long winded way of saying: 1) I think you mistimed the top (and that’s ok) 2) Buy these same names cheaper - but perhaps start dollar cost averaging (buy fractional amounts over time) so that if we keep running 50%+ from here you’re not underexposed 3) Too early to start strategizing HY/Bonds unless you made a fucking killing since April 4) Nice job being engaged in the market. Not saying this in a condescending way either - your view is just as valid as mine. Civic participation in our public equity markets is what makes our country the best.

Living_Ad2045

I would build a portfolio of S&P ETFs, with some amount in HY savings and 10-15% held in gold

borkthegee

> Cash, losing value by the day HY savings accounts are beating inflation right now

StuartMcNight

No. I am not making up that part. Is in OP’s post. He is planning to sit in cash until April lows. If April lows are not reached he will keep on a HY account or bonds. So yes. He said he is out of the market.

shortgamegolfer

You have to be right twice. First you have to wait and see if you were right this first time, and then you have to be right a second time getting back in. Let’s say you are incredibly lucky and are right twice. Way to go, you will definitely do this again, and again you’ll need to be right twice. Odds of that are very slim. Let’s say you are right on the first move, but wrongly buy back in before it dips harder. Now you are more likely to sell the bottom, having regretfully bought back in with weak conviction. You’ll remember that you were right the first time, so let’s just get back to that! Tried to catch the falling knife at the wrong time, so it’s time to sell a little lower, no big deal, and boom, it goes back up without you. Oh shit FOMO back in and boom, that was a dead cat, now you’re back where you started and feel really dumb. Ok let’s say you’re just wrong the first time. Now you’re sitting in HY savings missing the next rally. Finally you FOMO back in at a peak. Michael Burry lost a ton of money by being way too early with his market timing.

Scott7894

Wrong. Taxes. At 25 don’t be afraid of a crash. You can always and HY? Get some financial adviser please

lemonjalo

I’m commenting on this post OP made. “True If I can’t buy back at around the same levels as before I don’t think I wanna buy in again Then it’s bonds and HY savings account” It’s just a funny comment to me. He’s trying to time the market but then he added that he wouldn’t buy in stocks again if he can’t buy in at the same levels. The whole thing is just hilarious.

MJ_Hiking

"don't think I wanna buy in again" like... ever? The market is almost certain to be many times higher by the time you retire, and to greatly outperform bonds and HY savings. If you never buy in, you will miss out on massive gains. Seems like you are way too young to be thinking like this.

One-Brain6531

True If I can’t buy back at around the same levels as before I don’t think I wanna buy in again Then it’s bonds and HY savings account

helpertmuner

I have some really good stocks: 1. HY9H - SK Hynix Inc. 2. DTE - Deutsche Telekom AG 3. PRCX - Prosus NV 4. SAN - Banco Santander 5. SAN1 - Sanofi 6. BBVA - Banco Bilbao Vizcaya Argenta 7. ISP - Intesa Sanpaolo 8. ENEL - Enel Spa

pedronegreiros94

HY9H on Fidelity /IBRK.

Gelatostonk

Nothing here screams “recession just began.” Labor stress and credit stress are not flashing red; growth indicators are softening (PMIs, cooler retail) but not collapsing. So the Reddit “Great Recession now” takes are premature. Keep an eye on claims trending up, HY spreads >4–5%, and PMIs slipping well below 50 together—that combo would change the story fast.

Boheed

lol look at the HY spreads over the last week. Something's going on with private equity's AI investments and it looks like they're getting ready to sell everything, change their name, and start a new life in Thailand.

Shamusj

I had the same “everything at highs” problem, so I built a dashboard to anchor decisions ([Macropulse.org](https://macropulse.org)). Current prints: ON RRP ~$8.44B, M2 $22.195T (+$79.6B m/m), M2 velocity ~1.39 (flat). That mix usually means slower nominal, not a liquidity mania. My playbook: • Rebalance back to target weights; shave extensions >5% over target • Harvest covered calls on the biggest runners; stash premium in 3–6m T-bills • Escalate to 20–25% cash only on triggers: services PMI <50 for 2 prints, HY spreads +50bp in ~20 trading days, or unemployment’s 3-mo avg +0.3pp It’s not about calling the top; it’s about having tripwires before changing the portfolio’s risk posture.

Shamusj

Highs can run but sometimes it feels a bit scary not holding more cash. My “trim” triggers are: 1) services ISM sub-50, 2) payrolls decelerate with unemployment ticking up, 3) HY spreads +50bp in a month. Today none are tripped; with M2 ↑ but velocity flat, I’m just rebalancing and holding cash for dislocations. To help me with my portfolio decisions I recently created a free dashboard. Feel free to use it anytime if you find it useful: [www.macropulse.org](https://macropulse.org). Best of luck!

IFoundNemo313

I’m currently trying to figure out where to park my money. I’m doing ok in life as I’m in the military and have a family of 7 I take care of. I maxed out my Roth IRA for the year and also put 10% into my TSP a check. I have a HY savings of 17k and put 500 a month. Only thing we owe on is our mortgage and our car loan but the interest rate is so low it will only save us about 1500 to pay off early, so I’m not pressed on it. Any tips on how to learn options trading and other places I can start investing to build more wealth. I’m only 29 and want to build more.

Educational_Pop6138

HY9H on the German board. Thing is a rocketship.

jackieHK1

I'm also considering at least semi- retirement in 5 years. Whats ur strategy to de-risk? I'm 70% in an World Etf, 15% in a tech ETF & 5% BTC. I'm considering selling some of the World ETF & parking the cash in Gold. No real HY savings options in my country, we have time- deposits, I have a little cash in a 30 day one at 3.5% 🤷‍♀️ I woukd prefer to DCA down my current ETFs, they've done well & I've been aggressive with them but if there's a big crash like 40 or 50% + I'll be so screwed. No state pensions or anything in my country & it's expensive. Any suggestions to de-risk would be helpful, the current market is making me uncomfortable.

DryChemistry3196

What % would you consider HY, 4.5%?

BackstrokingInDebt

Why don’t you be more explicit in the fund allocation selection? - if you’re worried about US market, why go into US HY? HY is still betting on US corporate credits. That decision doesn’t fit your thesis - 20% DM. How much overlap to US is there? Makes your tracking abilities that more difficult. I suggest a DM ex-US so that each select have mutually exclusive holdings.

Electrical_Sir_4161

FWIW, I like the outline you’re sketching. The path you’re describing usually leaves fingerprints in the internals before it shows up in price. A few tells I watch: * Blow-off risk: higher highs on *weaker* sponsorship (internals diverge), leadership narrows to fewer mega caps, and HY spreads start to leak wider even as the index grinds up. * Healthy Q4 melt: pullbacks get bought with *rising* sponsorship, breadth improves, and defensives don’t outperform on up days. * Air-pocket Jan: sharp down moves coincide with sponsorship rolling over across timeframes, plus poor earnings revisions breadth. On the AI/ROI angle, I agree the story will hinge on whether capex translates to margin/Rev growth—if it doesn’t, you’ll see it first in positioning before headlines catch up. Side note: I built a simple 0–100 “Structural Index” (STIX) that tries to isolate institutional participation by timeframe. It’s been helpful as a sanity check—e.g., if price rips while STIX slips, I fade strength; if price dips while STIX climbs, I buy the weakness. If anyone wants to kick the tires on a couple tickers/sectors to track your thesis, DM me and I’ll comp a 24-hour pass. No list, no spam, no obligation—just institutional grade data in exchange for feedback on my data platform in beta.

fudge_mokey

>Last time I checked, HY spreads are significantly below LT avg at 300bps. So uh..what were those HY spreads doing in 2007?

HotHamWater_69_420

[Yevgeny Prigozhin](https://www.google.com/search?rlz=1C5CHFA_enUS964US964&cs=1&sca_esv=78726570b3b899ae&q=Yevgeny+Prigozhin&sa=X&ved=2ahUKEwih6oi68JuPAxWnD1kFHZybJuMQxccNegQIAhAB&mstk=AUtExfDj4QjdBklQVSUjBcqn3Hz0ou39B7t9HiTnNOPv9BcupiqlzlQ-rKJWHrNEFqh5KIqvk4l3YQAE41jYolFe4SpK5MDJgTOQaTLnvlYnS3HY9l6l_0L9uKBRM7RqnhMV7hORmYBgCKba-aW0R80N6SYWeEVC9ONe_f7g8o4D98-Qb2mx7VF3UgPa7GQyhEoJccGoDMZP9DHohiGCsCrIKP5WOom40VKZ9NAELeJhY6xbsw&csui=3)ed?

careyectr

Markets don’t need perfect politics to go up — they need profits to rise and the discount rate/risk premium to stay manageable. Right now, S&P 500 earnings are still expanding (Q2 y/y ~+12% and 2025 still penciled at high‑single‑digit growth), forward P/E is ~22x — rich but historically survivable when growth is positive — and credit markets are calm with HY spreads under 3%. Add a genuine AI/data‑center capex boom and a productivity uptick, and you’ve got real offsets to the headwinds you listed. Could we be topping? Sure — valuations lower forward returns and shocks happen — but the tape is being “paid for” by earnings/margins and capex today, not just by blind exuberance. If those pillars crack (EPS revisions roll over, credit widens, or inflation re‑accelerates), the bear case strengthens; until then, there’s a coherent bull case beyond vibes.

DinosaurGatorade

Hindsight isn't worth anything. Does this TikTok celebrity say anything substantial ("Vanguard caught slipping what should be HY into IG funds") or just ragebait using the name "vanguard" and "blackrock"?

HighFreqHustler

Married with a child, I keep 7 months on HYSA, the market can be pretty wild and I hope I never need it but knowing is there helps sleep well at night. Plus interest rates for HY savings are ~4%

Educational_Pop6138

1810 - Elon Musk (pre fall) and Steve Jobs rolled into one. Behemoth in non Western countries and the EV growth looks insane. HY9H - clear leader in the high performance memory segment. They are clear partner for choice for Nvidia and looking to do mass production of HBM4E in H226 which looks like a year or more quicker than MU. MELI - fintech and e-commerce synergises very well. EM also typically does well when the USD falls.

dvdmovie1

The only high yield anything where I actually like management and find it an interesting fund otherwise is BRW, which was taken over by Saba Capital in 2021. A summary from the fund's last annual report in 2024: "Below is an overview of the Fund’s portfolio performance for the period: Closed‐End Funds/Investment Trusts – Closed‐end funds continued to be a meaningful contributor to the Fund’s performance over the last year. The Fund primarily benefited from discount tightening as the average portfolio discount ended the period at approximately 10.7% from approximately 15.6% one year prior. Currently, the Fund holds about 60% long closed‐end funds, which are partially hedged. Cross‐Asset Relative Value Strategy – Dynamic positioning in Credit vs Equity indices (SPX/IWM vs HY index) contributed meaningfully in the third quarter with gamma and vega monetization around the volatility. Long/Short Credit – The Fund’s long exposure to bonds and loans, along with tactical hedges through CDX, served as contributors to the Fund’s performance during the Reporting Period. The Fund has opportunistically increased its allocation to long fixed income securities through investments in U.S. high‐yield and investment‐grade bonds and credit derivatives. Reinsurance – The catastrophe reinsurance market became dislocated at the end of 2022 (with premiums increasing, on average, between 20% and 50%+ YoY). The premium increase from 2022 has persisted, and the Fund has increased the exposure to about 13%. Agency Mortgages – During the depths of the regional banking crisis in Q1 2023, the interest rate volatility was significantly elevated and was “dislocated” compared to both equity volatility and credit volatility. Since then, there has also been a dislocation compared to investment grade corporate bond spreads. Although the dislocation has persisted thus far and led to moderate gains, we believe that this dislocation will likely dissipate. Equities – The Fund’s public equity investments benefited from the market rally and produced moderate gains. They were partially offset by equity hedges in the portfolio in place to neutralize the beta exposure in the Fund. Conclusion We will continue to search for investment opportunities with the goal of creating long‐term value for shareholders. If you have any questions about the Fund, please visit www.sabacef.com. We are grateful for your trust and support. Boaz R. Weinstein Founder and Chief Investment Officer Saba Capital Management, L.P"

Greedy_You6549

Coming from someone in private credit, those covenants are mostly nonsense. Most HY private loans have technically defaulted many times over since the onset of COVID. They just keep issuing amendments, kicking the can down the road until they can offload or exit via sale. Trust me, it’s another ‘08 house of cards. Yes, there are highly attractive investments in the HY private credit space, but those are for the big boys with money, not the public. Just my 2 cents

Classic-Finish-7433

My HY MM is paying 4.23% and down from 5.49% last year. Powell is getting the ‘too-late’ name calling from Potus, but I don’t foresee rates dropping below 4% in 2025

capgain1963

There are about 8k stocks in the U.S. but there are millions of different bond issues because each issuer can offer different maturities and coupons or interest rates. Typically bond issues are identified individually by what is known as a cusip number. When you buy a bond, you are expecting the face amount to be paid at maturity, and for corporate bonds, you generally get interest payments every six months (some pay monthly or quarterly, or annually). Aside from corporate bonds, there are government bonds (sometimes called bills or notes depending on maturity), and Municipal bonds issued by states, cities, school districts or other tax authorities like a port authority to build an airport or port. Corporate bonds are divided into high yield or junk bonds and investment grade bonds. HY/junk bonds are issued by companies that could default. Supposedly, independent rating agencies decide what grade a bond receives. Take these ratings with a grain of salt. When buying a bond, the primary driver of the interest rate associated with it is the credit worthiness of the bond issuer (historically, the U.S. government was considered safest, but this is starting to change), the maturity, e.g. because the credit of the issuer and interest rates can change over the life of the bond, current interest rates at the time of issuance. Most bonds pay back the full principle at maturity, so unless you sell before maturity, you should not lose principal unless you sell before the bond matures or the issuer defaults. Bonds typically trade at $1,000 face value. If a bond is bid at 99 1/2, it means $995.00. Most bonds are bought from dealers at the ask price and valued in your account at the bid price, which means you immediately have a small loss when your position is marked to the market in your brokerage account, unless you do exceptionally well timing the market. Fear not because this small loss will come out in the wash if held to maturity. Another thing to keep your eye on is any call features that are described in the bond issue. Typically, a bond issuer can buy back a bond after issuance at par or $1,000. This can suck if rates are falling and your bond rises in value because it has a higher rate or coupon but gets called away so the issuer can refinance.

LarryStink

The 40 bps gain  today resulted in 10-day realized volatility finishing at 6.85, slightly down from 6.86 yesterday. Essentially, realized volatility has nowhere to go from here unless we start consistently trading under 20 bps per day. Given how illiquid this market is and the persistent headline risk, sustained periods of such low daily moves seem unlikely. The market obviously recognizes this, which explains why both the VIX and VVIX traded higher today. That’s not all—both the 1-month and 3-month implied correlations also rose today. Both IG and HY CDX index spreads widened today as well. It’s uncommon to see higher implied correlations, rising implied volatility, wider credit spreads, and higher stock prices simultaneously. Generally, stocks trade lower when the other factors rise.  This unusual combination suggests the stock market has virtually nowhere left to go from here. You could obviously see more grinding price action tomorrow, especially since it’s Friday, but it feels like the days are numbered at this point.

FatCockFauci

I don’t get all the hate for having a bearish outlook on this sub, folks take it so personally when anyone isn’t a US perma bull. Quite the echo chamber in here. I agree the risks are to the downside than the up for US Equity. We probably go no where for 3 weeks while we are gamma pinned (JPM whale positioning). Cracks in the credit market probably hit before equities show weakness… that is baring some real ugly data print. What are your expiry’s? I wouldn’t go sooner than Sep/Oct I just took my hedges off last week. Heavily in Gold and international. I will look to reload some hedges higher, first in HY credit, then equity. We could very well make ATH before heading lower.

DavidMeridian

This is definitely not without risk in the case of a market downturn. As one of your holdings, you could consider SPHY, a HY bond fund that currently has a 7.7% yield, alongside a stock dividend fund like VYM. Bear in mind that a fall in asset prices could lead you to be caught with your pants down.

MindMugging

Foreign bond seems pretty attractive. Maybe some DM HY index? Or DM aggregate index?

dabby_dan

Dude you keep trying to play it off all silly like “I’m just another silly goose on this sub” but like you are legitimately dumb as fuck. You don’t belong here or anywhere near the stock market. You threw thousands of dollars in the trash and lit it on fire when you bought those absurd/impossible calls. Legitimately unfollow this sub, put your money in a HY savings account, and never invest again.

DavidMeridian

The first step is to come up with an asset allocation, and *then* choose the securities to conform to that allocation. Your allocation can factor in your individual circumstances & concerns. Your very short-term/rainy-day fund should definitely be in a stable fund such as a HY savings account or MM fund in a brokerage account. On the opposite side, long-term assets should be in indices that tend to grow over time (stocks/equities). VTI, VEA, and VWO come to mind. Companies that derive income from foreign markets (even US-based companies) act as an indirect USD hedge (and will deliver better long-term performance than an FX fund). I'm concerned about the USD as well, but it's definitely not going to collapse overnight. If value of USD is eroded due to inflation, then equities is your friend. If value of USD is challenged by other foreign currencies, then the result may be very good for export-driven companies in the US. If you're not sure & want to simultaneously contain your risk while also getting a reasonable return, then a diversified portfolio that you buy/hold is the best option. NB: consider also tax-efficient holdings, for any securities held in a taxable account.

OkSafety85

Wealthfront is an online, HY bank. They have a generic investment fund that blends something of VTI, VOO, etc. The service they offer is that they'll switch out various, mostly similar indices when they go down for tax-loss harvesting. It's more the generic match I'm referring to here. In theory I'd put it into Schwab and manage it myself sticking just to indices and avoid the fees.

QuietNene

I’m no expert but my understanding is that bond funds went down when inflation went up. Buying bonds is essentially buying debt, and inflation erodes debt (good for the debtor, bad for the lender). So the variable here isn’t interest rates but inflation. Rates usually go up when inflation goes up and hopefully they come down as inflation subsides, but it’s not quite so straightforward, as we’re seeing right now. The benefit of bonds is that they generally have a low correlation with the stock market, which makes them a good and safe way to diversify. You also get dividends. As for a HYSA, this is fine but just remember that this is essentially letting a bank invest your money for you. The “HY” part is pretty much always subject to change and will change if and when the markets suffer broadly.

roguehunter

The last missing and very important piece of the crash was the role of AIG. Fixed income investors and banks had massive CDS (single name and index) positions and AIG couldn’t cover the insurance when it was time to pay. This added to the liquidity crunch across uncorrelated asset classes (BSL TLBs, CLOs, IG HY).

Bighorn21

I am not a financial advisor so take this with a grain of salt but the way treasuries have been lately I am happy as a clam letting my stuff just sit in HY. I am planning to re-evaluate getting back into the market end of Sept or if market hits -30% from highs, whichever happens first.

Such-Yam-1131

Solid breakdown. Honestly, the deeper I’ve gotten into HY credit, the more I’ve realized how much nuance gets lost in these fund summaries. I’ve been following a newsletter that actually dissects the capital structure and issuer-level risk. It’s made a big difference in how I look at stuff like HYG.

Swimming_Author_8690

I appreciate your response, and apologize for my lack of clarity. It's really about relative valuation and details in this case. HY is still quite overvalued, and you can use options (puts) to express your point of view for a deterioration in credit, which might result in easier profits. For consumer credit, you can also take a secondary short in AFRM, but that stock has been quite beaten up from its recent high. If Klarna decides to list, you may consider that as a secondary short after the IPO, as it will have a richer valuation. Sezzle is the best short in this space; however, it has no options and is hard to borrow at most brokerages.

xabc8910

HY savings is to protect money, not grow it by any significant amount.

Gammanomics

Oh boy so many forecasts getting cut easily off this. Some obviously will inflate their numbers just for the sake of looking stable for the HY or FY 2026

curiousthinker621

I include HY bonds in my bond portfolio by putting 70% in BND, 20% VCIT, and 10% in VHELX. I don't recommend it because it adds complexity, and it is probably best to take your risk on the equity side. I haven't looked over the last couple of months, but credit spreads were tight at the beginning of the year, so high yield wasn't very attractive at the beginning of 2025.

portfolio_investor

Yes most investors are institutions, but do you think they allocate enough to HY in order to make it "fair value"? Thank you for the backtest, I must have misread the data then. About your last point, it is not obvious that HY bonds are less risky than a total stock market fund. Yes, a bond from a certain company is less risky than a stock from that particular company, but precisely HY bonds are from lower rated companies than a typical total stock market fund

lwhitephone81

Most investors are institutions, and there's no evidence this is happening. \>In fact, international HY excluding US has beaten international stocks excluding US in both returns and lower volatility. I don't think that's true: [https://testfol.io/?s=kiXKZEVFPkG](https://testfol.io/?s=kiXKZEVFPkG) But in any case, no rational market is going to demand higher returns from lower risk bonds than stocks. More risk = more expected return.

portfolio_investor

Thank you for your answer, but this might be not true in some contexts. For example, if every retail investor chooses stocks and bonds over HY, junk bonds would have a liquidity premium, thus having higher expected returns with HY than without it. In fact, international HY excluding US has beaten international stocks excluding US in both returns and lower volatility. Since I am not from the US, this is an interesting question for me.

DoubleSkew

Hey guys, getting ready for a first date right now Do I talk about Credit spreads between investment grade and high yield indices widening, are causing a steepening inbetween HY and IG CDX. Or do I talk about how the PBoC - Central bank of China has to deploy fiscal stimulus to offset fiscal disruptions caused by accelerated tariffs while preserving the value of it's local currency Renminbi? thanks

ThrowawayAl2018

Already mention 2 weeks back to put it into [Pillow Stock](https://www.reddit.com/r/stocks/s/eJQFL37HY2), you sleep better at night.

Parking_Cut1089

56 now, wow, HY and PE will be cooked if we keep rising like this. Oh and SS

DoubleSkew

Dude I told my cat that IG + HY CDX is starting to move, credit vol is getting blown out & major indices are in bear market territory. and they just meowed at me what does this mean.

DoubleSkew

Dude I told my cat that IG + HY CDX is starting to move, credit vol is getting blown out & major indices are in bear market territory. what does this mean.

k3t4mine

I think something has broken. Lots of talk on X about SOFR-FFR swap spreads blowing out, which is actually to autistic even for me to understand. Gist of it seems to be that the credit markets are starting to seize up. HY Credit spreads have been screaming about that for a week or so. Could see Fed and other CB’s step in pretty quickly if this isn’t just typical X doomposting.

DoubleSkew

Woah, IG & HY CDX making big moves

earthcomedy

was mostly in bonds/bills already. sold longer held positions (months-years) in early March / late Feb though. Like EPD, GLW (@ 50!). Also higher yield type assets (CLO, HY bond, Pimco HY) - JAAA, PAAA, SPHY. PHK Though got a very very minor burn from entering in small position on Int'l Value stocks though...but dumped remaining just before Friday's bigly down (which means < 2% loss on those positions rather then 7%+ now?) < 1% overall in equity mutual funds. And just keeping that for old time's sake.... now...what to do about my < 5% gold position?

sausage_phest2

Long term investors are licking their lips right now. As they should. Tune out the hysterical doomers and remember that their commentary is politically motivated. Scale into the bear market with long term growth stocks & funds. Keep your emergency savings in a HY account for any worst case scenarios like job loss. Just be smart with your money and block out the noise. The market will inevitably recover and you have a chance to set yourself up nicely.

watch-nerd

Moved to 25% equities back in November. Have 15 years of living expenses in TIPS, enough to last to 2040. The rest is in IG/HY, T-bils, alts.

watch-nerd

I'm not a boomer (Gen X) and reduced equity exposure to 25% in November 2024 to prep for early retirement in Feb 2025 (which I did). And that equity exposure is all in VT, so global. Everything else is TIPS, IG/HY, T-bills, MMF, tiny bit of alt assets.

Acceptable-Version99

I work in asset management as a risk manager. 20 years of experience. I would shift the geographic breakdown of your portfolio to a less US-centric approach. What you do keep in the US, focus on the mega caps in the equity space. Stay away from lower investment grade or junk corporate credit. Personally I have shifted some assets into Bitcoin (and this as a long-term skeptic of cypto in general). This is more of a play on the decline in the USD than some firm belief in BTC's future. The only part of real estate I would want anything to do with is data centers (DLR, EQIX). I would lower risk in my portfolio generally. Larger % in cash (short-dated USTs and HY savings accounts). I'm looking at government bonds in UK, New Zealand, Norway and a few others.

k3t4mine

If you wanted anymore proof that yesterdays "rally" was fake as shit, while that happened, HY Credit Spreads widened again from 347bp to 355bp.

watch-nerd

My stock allocation is down to 25% VT. If I'm lucky, the ex-US portions gains balance out the US losses for a breakeven. A smidge in gold and crypto. The rest is MMF/T-bills, TIPS, and IG/HY credit.

Fair_Lecture_3463

I didn’t touch my 401k or Roth just because I have decades to go with that. But I pulled every other penny I had out of the market and have it parked in a HY savings fund. The amount of people on the Fidelity thread yelling at me that I can’t “time the market”. Unreal. We’re clearly heading to disaster. I don’t need to hit the exact bottom. I just need to be better than I was.

Clone95

HYSAs only stay HY if there’s no recession, only bonds stay there.

BasicallyNuclear

HY savings can can have rate changes. If federal interest rate goes down.

sexyshadyshadowbeard

The question is not where rates are going or why? The question is, will this investment weather such events? If you are talking about AMECX or something similar, these are fixed income investments designed to keep and maintain your initial investment and allow capital appreciation. Your money is pretty safe there for the long term. You're still taking on risk and could lose money on this investment if rates decline and/or recession takes hold. Sounds like you're planning to use that money in 6 months. CD, Money Markets and even HY Savings accounts will eek you out \~4%. Why take a risk for another 2-3%?

paragonx29

Yeah that's making me nervous as well on bonds. I have 4 Indvidual ETF's in Euro/Japan hedges and defense. I'm thinking of putting the rest in HY MM (SPAXX at Fidelity).

Dangerous_Focus453

*delays* is the key word here. Trump changed his mind every other week. All this uncertainty means rocky times ahead. 95% to HY savings for me today. I may miss some gains but I can sleep just a little better at night, not much better but at least a little.

Ivanovic-117

yeah that sounds like a major down turn, if so, I am okay to buy the dip on VOO/SPY, made enough money but just holding HY savings and money markets last year. Now market/economy is one, interesting thing to watch is the housing market. If enough people loses their jobs, they cant afford their mortgage, then repeats 08/09? I doubt it, but I just wish housing bubble bursts without people losing their homes.

PIK_Toggle

Read Moyers book for the full HY experience. https://www.barnesandnoble.com/w/distressed-debt-analysis-stephen-moyer/1122997125

PIK_Toggle

There is material rollover risk with HY. It’s never paid, it’s just passed on to the next group of bond holders. In the event that the debt cannot be rolled forward, what happens? If you want equity risk, then invest in equities. If you want yield, look at private credit. HY as an [asset class](https://investor.vanguard.com/investment-products/mutual-funds/profile/vwehx) has been okay for years. I was long a bunch and dumped my position for equities. The investing thesis just wasn’t there. (I started my career in HY, so I’ve always had a soft spot for the asset class.)

Ok_Ganache_789

Diversity, no need to pay house at that rate if you are fine living there and have stable income. This is what I would do: - keep current budget of maxing out retirements - pay off any other debt like cars, boats, whatever - I’d take 80% of the rest and invest. Of that, I’d do 60% in a blend of S&P and NASDAQ, 20% in higher-risk stocks like AVGO, NVDA, or other growth oriented ETF’s like VGT or VONG if you don’t want to do you own DD, 15% in a blend of HY bonds aiming for 7%, 3% in some total fliers and 2% crypto - take the other 10% and put in HYSA - take the last 10% and do something totally memorable like a vacation. You don’t want to save all the fun for your retirement years. Enjoy life while you are young This is just my preference. I’m not ultra-conservative though, and would never park the majority in low yield accounts.

PIK_Toggle

HY is the equivalent of being long equities. For someone with a 4-5 year window, that’s a bad strategy.

BytchYouThought

I think yu mean Fed interest rates. That said, I don't move squat because I already keep bare minimum in the lower earning accounts anyway. 5.5% wax never gonna last. You'd be shocked to knkw 1% was considered HY not that long ago.

le_hache

Pimco is a famous fixed income fund manager you could check out. They have plenty of solutions from IG to HY covering many markets, corporates and sovereigns. You can screen on their website.

Relative_Tone_4870

Mixture of index/dividend medium growth stocks, and 5% HY with 5-10% of PMCC/CCs against positions. Will easily give above 10% over the next 10years..

Ok_Ganache_789

You can get HY bonds that are BB+ rated yielding around that

CapriKitzinger

https://youtu.be/HY-RJQBIbT8?si=GXgcxmEWZxspLuth This explains some things. You all are noobs.

Forward-Still-6859

Although I just use it for HY savings now, when I started doing it on my own, I used Betterment and woulld recommend it to anyone just starting out.

Jay298

The safe bond funds are short term treasuries. They pay about the same as a HY savings account. So IMO they aren't really worth it unless you just want to keep money in the account but not take it out as cash. Everything is vulnerable to loss including cash. If Buffet wants his wife's trust to be 90% S&P500, and 10% short treasuries, that's probably a good starting point for people with a long term time horizon and who aren't panicking. If you are panicking, I'd suggest cash and gold and small allocation of Bitcoin, as well as energy and utilities ETFs.

Bakerman82

Ah, yes! Another emotional train wreck. Yup--investments carry risk. Welcome to "Investment 101". The fact that you can't find profit off this is situation is an indictment on your ignorance on trading and investing. That guy you call an "Orange Dipshit" is making me and many people a lot of money. I do not concern myself with how you or anyone else invests their money or how much you gain or lose. That is YOUR burden to bear, not mine. If you lose your ass on a bad pick, you are probably too low-IQ to be in the market. Consider practicing risk-averse decision in safer, stiller waters to invest instead. Read the room? How about you get out of the room entirely. Might I suggest something like a HY-Save, ShortTerm CD, Corps Bonds--you know, shallow waters of the kiddie pool where your feet can touch the bottom with low risk. I would have made money under Harris--albeit much slower. Luck favors the bold. Viva la Trump! Make my portfolio moon again!

MadTechnoWizard

Given the recent political climate I've sold some investments and am thinking either HY savings or something like a bond ladder? How are we feeling about bonds?

BlueSpotBingo

Bro, $90k is bad but not so bad you can’t come back from it. Stop now. Put what money you can afford into a strategy with good upside and less risk. Start putting some in a HY savings account. You can TOTALLY come back from this.

Pour_me_one_more

Easy enough to just buy one of these: [https://www.amazon.com/Dabbledown-Tinfoil-Conspiracy-Clothing-Size-Large/dp/B0B1P83WZM/ref=sr\_1\_4?crid=21QJZDCJUP1F5&dib=eyJ2IjoiMSJ9.pmU\_AxqZXfO50WXWtWTdbPW98CJkGwSUSYitJjDb7CUb\_vUXJmTlUQYFAUFysSN0Bv-ku2IvRgPcMyJ1UThnaR62o99Cq1OstxM-fi8B21KhSSgLrGbg\_8b9PCR0FwJItJLMW14kaFly3XxMfeodMDy6ZdTC5ytE3hn1d0iY6z-YuYSX6DvgMOpigxZGlubE1wTrn5xx\_tp1DY06\_0ywxkhrettuAToGPo4QqAQII\_00DdGWqWWNW5EN596oleYOWbSwjZknDnUSd\_fXsUN\_A5R9HWsumr2xoUkW7o\_sjCmBjt-MEwc-8UEXqNPMv04KF32vuOGWBoXsbkal5qf70HY2rNGT9lvkP1iJnye85kTvpj08GYEMIuKHRQ-9Ge-JDaA2vX5rnZfs\_5L2xt881At\_qXpa\_Oh6gI9C-ltI-CIRy1a\_5UADtZErlvt2wLAF.-8nXSPxv1b3P7hVmdnqaJfuMRFazB3YTyo567DMt1yQ&dib\_tag=se&keywords=tinfoil+hat&qid=1738194205&sprefix=tinfoil+hat%2Caps%2C152&sr=8-4](https://www.amazon.com/Dabbledown-Tinfoil-Conspiracy-Clothing-Size-Large/dp/B0B1P83WZM/ref=sr_1_4?crid=21QJZDCJUP1F5&dib=eyJ2IjoiMSJ9.pmU_AxqZXfO50WXWtWTdbPW98CJkGwSUSYitJjDb7CUb_vUXJmTlUQYFAUFysSN0Bv-ku2IvRgPcMyJ1UThnaR62o99Cq1OstxM-fi8B21KhSSgLrGbg_8b9PCR0FwJItJLMW14kaFly3XxMfeodMDy6ZdTC5ytE3hn1d0iY6z-YuYSX6DvgMOpigxZGlubE1wTrn5xx_tp1DY06_0ywxkhrettuAToGPo4QqAQII_00DdGWqWWNW5EN596oleYOWbSwjZknDnUSd_fXsUN_A5R9HWsumr2xoUkW7o_sjCmBjt-MEwc-8UEXqNPMv04KF32vuOGWBoXsbkal5qf70HY2rNGT9lvkP1iJnye85kTvpj08GYEMIuKHRQ-9Ge-JDaA2vX5rnZfs_5L2xt881At_qXpa_Oh6gI9C-ltI-CIRy1a_5UADtZErlvt2wLAF.-8nXSPxv1b3P7hVmdnqaJfuMRFazB3YTyo567DMt1yQ&dib_tag=se&keywords=tinfoil+hat&qid=1738194205&sprefix=tinfoil+hat%2Caps%2C152&sr=8-4)

Valace2

Pretty fucking demoralizing isn't it? Have gotten to the point where I am seriously starting to look at my retirement, and am going to be contributing to it pretty heavily over the next 20 months. Am heavy into Meta, have been for the last 6-8 years, and it's just been getting beat on, like you said back to October levels is just depressing. I'm still way up, but yea red is no fun. Going to be starting my Roth and contributing the max and was going to start adding to my brokerage account, but now I'm thinking, contribute to the roth and let the money sit there, so I can catch up, starting it late, but then just keep funneling more into my HY savings account and take the 4.7%, all this red is just fucking awful.

tdwaters70

I run the gamut, total bonds (BND), aggregate bonds (SCHZ), HY corp. (SHYG), Tips (VTIP). Some are to reduce volatility, others for income

ZookeepergameEasy938

fixed income is such a wild place lmao - i’ve heard the craziest things come off of HY desks

Internal-Arrival7939

True, their Telco segment has been hit hard, down 51% for HY25—more than I had expected. Adding to this, their Positioning business is down 23%, which accounts for the entirety of their revenue downturn. However, there are positive signs suggesting potential recovery in these areas. Regarding scaling into Space and AI, you raise an excellent point. With limited cash reserves, significant scaling will likely depend on one of two scenarios: 1. A major contract win with a significant player (e.g., Rocket Lab), which would signal market confidence and provide a pathway for growth. 2. A takeover bid, which could inject capital and resources to enable scaling. Neither of these outcomes seems far-fetched, given Rakon's track record and positioning in its niche markets. Despite the disappointing HY25 results, I’m holding for now. The potential for a turnaround in Telco and Positioning, combined with the possibility of securing a major contract or another takeover, keeps me optimistic. On that note, one point from their HY25 report particularly caught my eye and seems to have resonated with others: https://businessdesk.co.nz/article/markets/rakon-spent-additional-17m-on-acquisition-costs-is-there-another-bidder

CovfefeFan

Yeah, I was thinking of buying puts on some clo equity tranches but haven't spoken to anyone at a bank about this. AAA-BB spread might also be cheap (and I agree much more correlated). Even a simple option on CDX IG should get the job done- if these are even traded. IG/HY spreads are quite close to multi-year lows as if the next 6 months will be smooth sailing.

andy_marquez

For dividends, SCHD is a great addition to VYM/DVY. For growth, big tech is smart but maybe skip ARKK (bit too volatile) Low-risk with HY savings/CDs is perfect. Best of luck.

aesthetics4ever

HY is the opposite of safe.

Spiritual_oligo

In addition to warrant interest expressed here, I’ve personally taken interest in the shares. If anyone wants to join this investment experiment, join me… https://www.reddit.com/r/psyence_stock_PBM/s/CJ3HY7OyPY