HY

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

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Or a HYSA. Ok it doesn’t even need to be HY.

Valace2

I have joined that sub as well, I am going to go and talk to my cousin's tax guy who is also a financial adviser. I am 47, my income situation is going to decrease quite a bit in 5 years and I need to prepare. Own my own home, and have 160k between my stocks and HY savings, but no retirement accounts yet, will be rectifying that. It's just me, will most likely sell my home, either to rent or buy a smaller house, haven't decided my daughter will be off to college then, thankfully her college is paid for already, so I won't need the home I have now. Will use that equity for my retirement. Plan on working till I am about 62, but depending on my health I may work part time after that. I don't mind working. Need to start putting something concrete in place.

Valace2

I get that, I guess at the moment, I am trying to decide what I should do with the money I have in my HY account, whether there would be a better place for it? I like the fact that it is liquid, as its my primary savings and emergency fund. My stocks are for the longer term, but I only have shares in two companies, and I think most would consider that pretty risky, but my Meta shares have done very well for me. I had a good portion of my savings in a basic money market account at my local credit union up until about a year ago, Was always frustrated at the pathetic interest it accumulated, so I looked into lending club as was floored to find that they had their HY savings accounts offering 5% with no minimum balance and no fees.

Sil5286

I think odds are very good that you end up profiting from this position. Q4 is typically the strongest quarter for the market. November-April is also the strongest period for markets seasonally. Markets tend to rally post election regardless of who wins. Consider these statistics (from fundstrat and finom group): -The median SPX return from October 15th to December 31st is +5.17% since 1928. -The median SPX return from October 15th to December 31st in ELECTION years is +7.04% since 1928. -Median SPX gain in Q4 after gaining 20%+ in first 9 months has been 6%, since 1954. Job market cooling a bit but still strong (hurricaine impact). Unemployment steady at 4.1%. GDP grew at 2.8%. Inflation came in slightly hot but still ok. Consumer spending and confidence is strong. Retail sales have been resilient. ISM services have been trending strong for months. Manufacturing continues to slump but smaller part of US economy. Corporate buyout blackouts ending, fiscal spending typically strong in Q4, china stimulus, other countries also cutting rates, VIX likely to fall after elections - all these factors point to increased liquidity which should be supportive for equities. Credit spreads (HY v Treasury) are actually tightening… this is a risk on signal. Lastly, earnings have been mixed but the megacaps have been pretty good imo. MSFT and AAPL met expectations but guidance was a bit weaker than expected - they fell a bit due to valuations imo. TSLA, GOOGL, META, and AMZN had strong earnings and solid forward guidance. All their capex projections point towards another good earnings for NVDA as well. TSM, NOW, LCRX, NFLX just to list a few more important companies that printed well. THIS IS NOT FINANCIAL ADVICE. This is just my opinion. I think we will see a Q4 rally post election- maybe some volatility into mid November. You can always throw on some protective puts in the meantime to ride out the volatility.

Vast_Cricket

HY Investment bond etf. Anytime to get in and out or income. HYMB, FDHY etc

N0rthernLight5

ISIN US78392B1070 is traded on many exchanges globally, especially Frankfurt under symbol HY9H.F/HY9H.DE

angrybeehive

In 2008, the HY bonds went down a lot in price. However the yield didn’t drop much at all and recovered within a year. The dip was unjustified and whoever bought would have had enjoyed 16+ % yield on cost.

wnba_youngboy

I like your last point. HY bonds aren't exposed to interest rate levels and credit migration events as much as investment grade bonds (if at all) and are more a bet on the company than they are on their debt. This means HY debt is more correlated with equity returns than other FI classes. OP can get similar exposure by buying long-dated SAVE calls if he plans to go long the bonds anyway.

wnba_youngboy

HY/junk bond spreads are derived from their probability of default (POD) and loss given default (LGD), which is expressed as a percentage of notional. You can imagine that as the POD goes UP and the LGD goes UP, the price of the bond goes down, and the YTM goes UP. So the price that you're seeing is the market pricing a pretty material default possibility. Debtors are typically the first in line to get assets in bankruptcy, depending on the type of debt. They're not covered completely in Ch11. Otherwise the market wouldn't price these bonds that way.

BizBerg

Keep 3 years of living expenses in cash -- 1 year in HY Savings 2 years in CDs. The rest you keep in the bond AND stock market. Dont put all your money in bonds as you could live till 90 and your money will run out.

Particular_Hand2877

Yeah if he was worth anything, he'd have that money to work within a few days. I'd just tell him nevermind, take it back and invest yourself or throw it in a HY savings. 2 1/2 weeks is way too long, in my opinion.

Resident_Praline_738

Phoenix Group's loss of £646m due to economic variances. What are these adverse economic variances? What does this mean: 'The net adverse economic variances of £698 million (HY 2023: £3134 million) have primarily arisen as a result of losses from rising interest rates and a rise in global equity markets on the hedges the Group holds to protect its Solvency II surplus.' What has caused such a loss, despite what appears large profit from their operations? And how are they maintaining year on year losses?

echochambermanager

So buy more international stocks and less US stocks and buy more US HY and less international HY. Got it.

ptwonline

This means one of two things: 1. HY bonds are a better investment vehicle and will continue to outperform 2. Intl stocks have underperformed and become very cheap and so should outperform HY bonds going forward. IOW, this is interesting but not necessarily helpful.

MONGSTRADAMUS

5% on cash holding isn't gong to last forever , it would come down to what your purpose for this money is. If its just like a savings account then RH cash or one of the ultra short term treasury etfs like USFR or SGOV would be better option, but those will also go down when interest rates go down. Back a few years ago the savings rates were a bit over 0% so I wouldn't expect this 5% to stay here forever. With respect to BND and High yield corp yes they will have higher yields but they are much more susceptible to interest rate changes. You can look at Total bond vs Cash vs HY corporate since 1987 [here](https://www.portfoliovisualizer.com/backtest-asset-class-allocation#analysisResults) I personally have my cash in USFR, floating rate treasury etf, its give a nice yield while also being state tax exempt which your RH cash and most MMF aren't. YIeld as of today for it is 5.28%. I am well aware when rates go down the yield will go right down with it.

roose011

I don't see anything particularly surprising about this, but I think 2008 and 2009 are skewing your numbers. If you exclude those years, then Int'l definitely beats out HY. High yield is less risky than equities given that it's lower in the capital stack, so generally trades with lower volatility. High yield spreads are among the tightest they've ever been. The difference in valuations between Int'l and US equities has rarely been wider (i.e. US HY is expensive, and Int'l stocks are cheap). Another thing is that USD has appreciated a decent bit over this time period, so you may also be picking up some negative impacts of currency from the MSCI World ex US. Lastly, High Yield income suffers from more reinvestment risk and the income is taxed as ordinary income, so I just want make sure that the takeaway here shouldn't be to dump Int'l stock and buy HY because it has a higher return expectation. I think the answer is "it's nuanced"

SocialSuicideSquad

Bro you gonna need to get some HY leaps to pick that shit up.

ChuanFa_Tiger_Style

HYSA may not be HY for long, if the Fed cuts interest rates 

SlayerOutdoors

I keep 50% in a HY savings account that's turning about 4.75% and accessible in about T+2 usually if I need the cash and the rest invested. I could swap it for a high yield MM in my brokerage but I'm only grabbing another 10 bips or so and then T+1+2 to get the ACH to my cash accounts. It depends on your time horizon. We are looking to buy a new house in 1-2 years so we can't have everything at-risk. If you're longer time horizon focused, 5-6 or more years, I'd definitely consider going more risk on and DCA'n into this market. Time horizon is the #1 factor in determining risk tolerance and subsequently, asset allocation. There are other sub factors but typically, time horizon is the top of the hierarchy. I'd be shocked if the Fed doesn't step in soon. I would say there's an 8/10 chance they decrease in September. Seigel today said "the Fed needs to step in on an emergency basis with 0.75% drop." That's a bit aggressive but the way the earnings and economic data has been? The Fed I feel is going to make a move.

Ready2gambleboomer

*Dude you'll be fine. Money is just a way of keeping score & in the end the score doesn't matter. Enjoy your life.* [*Katt Williams - Enjoy your Goddamn Life. #shorts (youtube.com)*](https://www.youtube.com/watch?v=WES1HY6w7Zk) *Rock on.*

ReallyColdWeather

The last time small caps were this undervalued relative to large caps was 2000. So the small cap space is definitely a cheap trade right now, even with the run up and pull back the last couple weeks. But keep in mind that 40% of small cap companies are currently unprofitable and seeing negative earnings. Regarding startups - if you’re referencing private companies then that’s irrelevant to the public equity market. Due to the current cost of capital and lack of exits in private equity, I doubt valuations are anywhere near where they were in 2020, where there absolutely was a bubble. HY stands for high yield debt. It’s the debt issued by sub-investment grade companies that generally offer greater yield for increased credit risk.

superloser48

I work in tech. I can say that at least within tech, the startups/smaller companies are either expensive, or cheap because they are heavily dependent on big-tech. Most SaaS companies are just running on google/fb ads. I do not know what is HY and not getting it from google

ReallyColdWeather

There isn’t really a bubble, but I don’t feel like addressing that part as others have. Regarding cheap asset classes from a valuation standpoint - CRE, small caps, international markets are all historically cheap. Equity vol in general is cheap right now. On the FI side, HY may not be cheap but has attractive technicals from a supply standpoint, and interesting carry opportunity as rates come down.

Burrows-knee

Well, at least you can still collect that $300 a month from your HY savings, until the rates start dropping.

holiwud111

Update; OP moved the other $100k out of HY savings and reinvested it in Beanie Babies.

LemmyKRocks

OR you could have not been regard and just put it in a boring HY and collect 2100 a month 

Next_Growth5111

This is my answer too. Probably the only benefit of paying of this mortgage early at this interest rate is a mental benefit, which shouldn’t be discounted. But if it were me, I would make this extra payments into a HY savings or their vehicle to get the higher interest rate, then once I have a lump sum big enough I would pay the mortgage off in a single payment. Again, I would never pay this mortgage off early, but if I did, this is what I would do. 

bmiddy

No. They didn't This is insane thinking. Money does not "evaporate". Someone sold very high and is now sitting on a HUGE pile of "cash". The wealthy may not have lost a single dime. All you do is sell shares, put them into a HY savings account or bonds and let them accumulate interest. Why do morons think someone selling at a high and taking the cash and putting someplace is "losing money".

Reasonable_Flan_716

https://www.reddit.com/r/wallstreetbets/s/Kx4ElMX7HY

Trader_santa

Hynix seems like the better buy, to bad only way to buy is the Frankfurt GDR HY9H😐