U.S. investor Jim Rogers pegs junk bonds as a short-sell candidate

The Bank of America Merrill Lynch junk bond index shows the difference, or spread, between junk bonds and benchmark Treasuries has shrunk dramatically this year, though not quite down to the record tight levels seen in 2013. The BAML index showed junk bonds are holding about 200 basis points spread over Treasuries, down from 298 basis points since the start of the year.

DYI Comments:  The only reason to purchase junk bonds with this small of a spread is for speculation.  For investors will want to wait until a market smash arrives providing a 700 to 1,000 basis point spread above treasuries.  At that time you will have a margin of safety and a competitive yield shielding you from possible defaults.  Vanguard's High-Yield Corporate Fund is our first choice for investors.

DYI