No. of Recommendations: 2
<But that means guessing, at least over the long term, junk will recover to at least current trading valuations, (I am tempted in my 403(b).)>

Loki, I wouldn't do that. Everything written about the "covenant-lite" junk bonds that were issued over the past 3 years makes me shudder.

Like the subprime mortgage bonds, which defaulted in higher-than-modeled percentages, I strongly believe that the next recession will cause a higher-than-modeled percentage of junk bonds to default. Even now, I don't think the risk is fully priced in.

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