While European junk bonds don't provide as much yield as they have in the past, the quest for yield still leaves debt-ridden European nations as a viable option to invest in. The fact of the matter still remains that government bonds from Spain, Italy, Greece, and others provide long-term yield.
The risk on these bonds is still there, but with yield in today's bond market becoming more difficult to find, there's still nothing quite like junk bonds. The situation in Western and Southern Europe appears to be getting even worse, particularly for Eurozone nations. Spain's unemployment is at 27% and around 50% for youths. The same problem is occurring in Italy, although in a less dramatic fashion.
Junk bonds have been making news recently as investors have been selling off junk bonds in masses. While the prices on these bonds is higher than before, investors will be hard pressed to find yield quite like that of the government junk bond field. It is important to note that these bonds are extremely risky considering the state of Europe and its bleak future prospects.
But don't dismiss junk bonds quite yet. Investing in these depends on how risk-averse you are. The fact remains that for aggressive investors, this could be a very profitable payoff.
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