On Nov 14, 8:20*am, beliav...[at]aol.com wrote:
- quote -

Here is an article that tries to brainstorm why corp bonds seem so
volatile/cheap, and whether their attractiveness may be real or
mirage: http://www.economist.com/finance/dis...ry_id=12607330

Wonder how a retail investor plays "corp loans" that I hear so much
about. Would this mean something like fidelity floating rate fund
ffrhx, here plotted against a corp bond etf?
http://finance.yahoo.com/q/bc?t=3m&s...=m&q=l&c=lqd++

see
http://prudentbear.com/index.php/com...r?art_id=10150

Corporate bonds and loans have become the "new" stocks. The day-to-day
volatility of corporate bond mutual funds, especially junk bond funds,
has become comparable to "normal" stock market volatility. For
example, the Vanguard Long Term Corporate Bond fund (VWESX) is down
16% year-to-date. The stock market is effectively a 3 or 4 times
leveraged version of its old self. Many investment banks are saying
that corporate bonds and especially loans are cheap relative to
stocks, and there have been articles in the Wall Street Journal and
Barron's to this effect as well. For investors who have money in tax-
deferred accounts, I suggest that some exposure to stocks be partially
replaced by investment grade corporate bond mutual funds. If corporate
bond spreads narrow, there could easily be a 20% return next year from
corporate bonds. If they do not and corporate bonds continue to
suffer, it is unlikely that stocks will do well, either.

The concept of bonds as a separate "asset class" distinct from stocks
is an abstraction that has temporarily broken down, unless one is
talking about Treasury bonds.