November 22, 2024
Financial Assets

High Interest Rates Are Reviving This Junk-Bond Investment Strategy

For decades, credit rating agencies have unintentionally provided bond investors with an almost guaranteed way to turn a profit: When the firms demote companies from investment-grade, many money managers are forced to sell, because they have mandates forbidding them from owning junk debt. Such sales typically happen fast, pushing prices below those for bonds with

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