What are high-yield bonds?
They are bonds that pay a high rate of interestbecause the company has a lower credit rating. Since their ability to make interest payments is based on the health of the company that issued it, their prices react more like stocks than other bonds. They’re sometimes called junk bonds, depending on their ranking by credit agencies. Q: What are TIPS? A: Treasury inflation-protected securities are issued by the U.S. Treasury. They are similar to treasury bonds but have the additional feature of a coupon payment that adjusts their principal for inflation (up or down).
