That question is hard to answer now because there's so little activity in the junk market. Even in the best of times, some bonds might not trade for days or weeks, because there are so many bond issues.
"You can't move any paper in size," says Andrew Feltus, co-manager of Pioneer High Yield fund. "Everyone is wanting to buy, but nobody is willing to. The situation is just frozen."
That's why it's hard to tell whether the worst is over. Moody's Lonski is cautious: "Downside risks outweigh the upside potential. Especially in the housing area, it's premature to say the end is in sight."
Still, many bond managers are comforted by the Federal Reserve's response so far to the credit crunch and feel confident that Fed Chairman Ben Bernanke is on the right track. "My gut feeling is that the Fed will do whatever it has to in order to avert disaster," Feltus says.
If you own a junk fund, it's unlikely you'll suffer big losses. Those big interest payments can compensate for many sins. The worst 12-month period for junk-bond funds since 1978 was a 12% loss in the period that ended in October 1990, according to Morningstar. In contrast, the worst 12-month period for the Standard & Poor's 500-stock index during the same period was a 26.6% loss in 2001.
If you're thinking of buying a junk fund, it could pay to wait just a bit longer until the credit crunch stabilizes. A more sensible approach might be to start adding to a junk fund at regular intervals. You won't hit the exact bottom. But you might be close.