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My trading record (2021-08-26, buy US bond PBF Logistics)

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Share the reasons of buying US bond PBFX 6.875 05/15/23 of PBF Logistics LP and share my views.

Abstract: Share the reasons of buying US bond PBFX 6.875 05/15/23 of PBF Logistics LP and share my views.

Transaction detail

Today I am sharing with you about the transaction that I made on August 26. The details are as follows:

Bought bond

  • Company: PBF Logistics LP
  • Bond: PBFX 6.875 05/15/23
  • Face coupon rate: 6.875%
  • Maturity date: May 15, 2023
  • Bought face value: US$4000
  • Bought bond price: US$97.175
  • Credit rating: B2
  • Commission fee: US$11
  • Bond yield: 8.647%

Reasons of buying PBF Logistics LP bond

It can be said that investing in bonds is simple, but it can also be said that it is not simple. The simple point is that you just need to calculate the bond yields, and then choose to buy corporate bonds with high yields and relatively higher credit ratings. But the actual cases are often not so simple. Usually bonds with higher yields represent higher risks, and when the market sentiment is better, like now, the bond returns of companies with more stable performance are usually quite low.

On the other hand, even if you choose to invest in bonds of companies that have stable business, it is possible that after a period of time, or due to changes in the industry, the company’s operations may suddenly become difficult. For instance, if you encounter a financial crisis, it is more likely to cause the company to close down. To illustrate it clearly, let us examine the cases of covid-19 in 2020, many companies that developed smoothly before the pandemic, such as resource mining companies, have gone bankrupt after the pandemic broke out. If you invest in the bonds of these companies, you will most likely lose almost all of your money.

Of course, the above-mentioned unfavorable situations are generally only a minority, but if you want to invest in bonds to achieve long-term success, you must try to avoid this situation, or minimize the adverse impact on you in the event of such an extreme situation. The most effective way is to diversify your investment in different companies. As I said in the previous article, if you choose to invest in bonds, you must understand that what you are looking for is a stable and normal return, so you should diversify your investments in as many companies as possible. A large number of different companies in different industries will be even better.

The choice of PBF Logistics LP’s bonds this time is based on the above principles. Try to choose companies in different industries. Of course, the rating should not be too low. Therefore, I will only choose some corporate bonds that are not lower than B2, and I will try to avoid some risky industries such as resource-based corporate bonds.

Comments and sharing

If you have any questions, please feel free to leave a message or comment below, I will reply you. Or if you find anything incorrect in the article, please let me know and learn from you. If you find it interesting or it may help you in any sense, please share with other people.

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