Cracking the Code of High-Yield Bonds: Expert Guidance from Michael Wagner
Michael Wagner, co-founder and chief operating officer at Omnia Family Wealth, is mentioned in a recent U.S. News & World Report article, discussing 7 of the Best High-Yield Bond Funds. He provides insights on fixed-income investments, specifically focusing on these high-yield bonds. According to Wagner, high-yield bonds are corporate bonds with credit ratings below BBB from two out of three recognized credit-rating agencies. He explains that investing in high-yield bonds involves a higher level of credit risk and the possibility of a complete loss if the issuing company defaults on its debt.
Wagner emphasizes the importance of diversification when investing in high-yield bonds to mitigate the higher credit risk. He suggests that retail investors should access high-yield bonds through pooled investment vehicles like mutual funds or exchange-traded funds (ETFs) to achieve diversification. Wagner notes that analyzing the high-yield bond market requires significant due diligence and credit-risk analysis, which can be challenging for individual investors.