Bond market is not as famous as stock market, however is is huge and most of the times even larger than stock market. Bonds look little boring compared to the stocks because cannot bring impressive return on investment and cannot make you rich. And of course everyone wants to get rich fast. Life is a short term opportunity and there is no place for term investing.
However, bonds also sometimes can offer good returns. But of course not bonds issued by the most stable governments but bonds that are issued by companies that have low credit ratings. Such bonds are called junk bonds and investment in these bonds is quiet risky. Of course not that risky as is risky investment for amateur investors in stocks. Maybe risk of junk bonds is similar to the safest stocks as value stocks of very stable and matured companies. But better stocks and bonds not to be compared and junk bonds are the riskiest in bond asset class.
Well junk bonds can be especially profitable when market at the real trouble. Because when markets are very low and investors are afraid to risk with their money, high yielding bonds falls in value. When bonds fall in value that means that yield is increasing. The higher is yield of the bond the higher return from the investment can be achieved. The thing about bonds is that also contains some risk even without a case of default because bonds fluctuate in value too.
The longer is the maturity of the bonds the it can be volatile in value. And the junk bonds normally even more volatile than standard bonds.
So if you will decide to invest in junk bonds you should be really careful about that but it doesn't mean that you should afraid of risk totally. Risk is normal thing in investing just you have to be sure that you are under control. The factor when investing in bonds and especially in junk bonds is diversification. Very wide diversification decreases your investment risk greatly and it is a best tool for this type of investment.
