One of the more attractive investments in recent years has been in forms of debt, such as bonds.

Many bonds can be stable assets. But others, such as “high yield” bonds or “junk” bonds, can come with many unforeseen consequences for your portfolio:

be careful with high yield. Understand the risks. For instance, when does the company need to refinance? Can it cover future debt service costs? Does it have any interest rate risk exposure? Are you getting compensated for the risk through the return expected?

Sure, the highs are high if you purchase this risky debt and sell at the right time. But if you’re trying to build a steady portfolio, high yield bonds should not be in consideration.