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Physician's Money Digest
November15 2003
Volume 10
Issue 21

Finding Junk Gems

Author(s):

If you're tired of piddling returns onmoney market funds and US Treasurysecurities, it may be time to look into junkbonds. Because of their greater risk, junkbonds give you a higher interest rate thatcan pump some life into your bond portfolio.And a healthier economy, whichmakes it easier for companies to pay backdebt, lowers the risk factor. To cut downon risk even further, stay away from individualjunk bonds and go for a mutualfund that specializes in high-yield bonds.These funds are currently up an averageof more than 16% so far this year, severalpercentage points higher than theyield on Treasury bonds. Note: Junkbond funds often act more like stockfunds than bond funds, which meansthey could benefit from a stronger economyeven if interest rates rise.

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