No, we’re not talking about the next Mortal Instruments book. A fallen angel is a bond that had previously been given a high-quality, investment grade rating but has since fallen from glory due to the overall ratchetness of the issuer and is now rated as junk.

A lux name for junk bonds is high yield but, make no mistake, these bonds have the lowest quality ratings and, because of this, could offer an opportunity for higher returns than higher quality bonds. High yield bonds tend to move more like stocks than traditional higher quality bonds. All the more reason to diversify your bond portfolio and include bonds of different qualities, durations and maturities.

Have a great weekend Savvies!

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