Question

Why are junk bonds more popular during a bear market?

Answer 1

Junk bonds are popular during a bear market because they pay higher interest. Junk bonds also provide more upside gain after a bear market. Lastly, junk bonds are like stocks.

Answer 2

Many times junk bonds are a high risk bond, but are also a high return. They are more popular during a bear market for this reason only. Sine they have a high return it compensates for the high risk. The junk bonds can also help a persons personal portfolio. Junk bonds also issues with a 10 year term or less. A bear market is when there is a steady drop or stagnation in the market over a period of time.