It's A Stock For The Ups, A Bond For The Oops

Convertible issues can calm the ride

Can you stay in today's turbulent markets and still sleep at night? Convertible bonds offer one option. Convertibles can be exchanged for stock at any time during the life of the bond. They often provide as much as two-thirds of the gains you'd get from the underlying equity--at half the risk. Says James Peattie, manager of international convertible research at Merrill Lynch in London: "They tend to be a safe haven in a falling market."

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