Want to make money? Don’t forget about the junk! Here’s your trade on the SPDR High Yield Bond ETF (JNK) (May 11, 2016)
I’ve got a random chart for you in this Free Chart video, junk bonds ( NYSEARCA:JNK ); those are high yield bonds that aren’t investment grade. Look at the 6.32 dividend yield, that’s pretty high. After taxes you’re still doing pretty darn good. But the chart is what’s working for me, because when you combine this with the crappy yields that you get on like, the Treasuries, 1.74 (a really lousy chart here), I will take the junk bond ( NYSEARCA:JNK ) ETF. Plenty of liquidity, means there’s buying in there guys. A pullback in to the 50-day moving average. I would be relying on this uptrend, higher high, definitely from these, higher low, higher high still, higher high low. I would be buying this with a stop a little below here, maybe even lower still, and then just ride this thing and collect this dividend.
And I want you to think about this, 6 percent, that’s a pretty big yield. And right now, with rates so low, investors are looking for high yielding trades; that’s why Altria Group ( NYSE:MO ) is doing so well at 3.5 percent. Reynolds American ( NYSE:RAI ) at 3.3 percent is doing well. Phillip Morris ( NYSE:PM ), 4.0 percent is doing well. They’re smokin’ stocks that are smoke, they’re working. So don’t forget about stuff like this ( NYSEARCA:JNK ). It’s a great chart. It’s showing a push back up above the 200-day moving average. When I can get a 6.32 percent yield and then some capital appreciation to go on top of that, I would say, in the course of a year, I’ve got a 10 percent investment, and it’s an ETF so it’s not like they’re all going to go belly up. It’s an ETF, by definition diversification. If you think rates are going to start screaming then this is going to be a problem. I personally don’t think so. So anyway, give that a try.
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