In March, the U.S. Federal Reserve moved to prevent a coronavirus-induced downturn by promising to set up an entity to buy corporate bonds and ETFs, including junk bonds and junk bond ETFs. My concern is that the Fed has simply created another time bomb that future generations will have to defuse.
It’s worth remembering the idea embodied in the aphorism, ‘Wall Street will sell what Wall Street can sell’. But just because an investment product exists doesn’t mean you should invest in it.
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