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November 16, 2015

Are high-yield bonds a threat for stocks?

  • That question could have caused smirks years ago but panic in the high-yield bond market could be a problem for mutual funds known as “hybrids.”
    • By STAN CHOE
    AP Business Writer

    NEW YORK — How upended have the rules of investing become? Consider this: Investors are talking about whether problems in the market for corporate bonds may spill over into stocks and drag down their prices.

    That question could have caused smirks years ago. Stocks have historically been the riskier investment, prone to big swings, while bonds just chugged along. But analysts say the high-yield corporate bond market has become increasingly fragile. Conditions may be lining up where investors one day find no buyers for bonds when they look to sell, or at least none at a palatable price.


     
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