What the experts say

Junk bond jitters; 401(k) plans recover; Time for a raise?

Junk bond jitters

High-yield bonds have had a great run over the past few years, said Jane J. Kim in The Wall Street Journal. But after experiencing jumps of 57.5 percent in 2009 and 15.2 percent in 2010, the market for so-called junk bonds is looking significantly riskier. Problems in Japan, coupled with Mideast turmoil, have driven down prices on these bonds in recent weeks, and “several” high-yield issues have been postponed. Global events aren’t the only concern. As more investors poured money into junk bonds in recent years, companies began issuing bonds with “weaker investor protections.” This combination of factors suggests that investors “would be wise to exercise caution.” A better bet right now: emerging-market bond funds, which offer high yields, but without the credit concerns hanging over many developed countries.

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