Accidental High Yielder

The bond was originally offered at par of $1,000 with a coupon of 3.2%. It was supposed to be rock-solid safe. It was owned by nervous nellies and insurance companies and foreign governments as a store of wealth...all playing defense, not offense.

But then bad things happened to the bank who issued those bonds. Bad trades, fraud, and that whole ignoring-of-the-internet thing. So the creditworthiness behind the bond plummeted, and it now trades for $300, still with that same $32 a year coupon. Only now, the bond is a high yielder..."accidentally"...and yields over 10%.

The same can happen to dividend-paying equities. All is grand and safe and secure and gravy...until it's not.