Bonds

Just When You Thought Bonds Were Safe

2 Comments / Bonds / By

In today’s article Jared Dillian compares the 2/10 yield curve to a “Double Black Diamond” ski slope. In other words, it’s wickedly steep! The yield curve he is talking about here is the 10 year treasury yield minus the 2 year treasury yield. This spread measures the steepness of the yield curve. When it is high there is a big difference between the 10 year treasury yield and the 2 year. When it is small investors are not receiving much benefit for taking on longer term risk. Normally the yield curve is positive and longer-term rates are significantly higher than shorter-term rates. In abnormal cases the yield curve becomes “inverted” and short-term rates are actually higher than long-term rates. As Jared tells us, if even a small amount of inflation returns it will create havoc in the long term bond market.

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U.S. Treasuries: The Comfortable Choice for Uncomfortable Investors

Bonds, Government / By

 U.S. Treasuries- A quick perusal of the business pages or afternoon market reports might be enough to convince some timid investors to scrap the whole idea of investing and instead just shove their life savings into a shoebox in the closet. But even as the economy struggles to repair itself and the markets start clawing

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A Brief Introduction to High Yield Bonds

Bonds, Investing / By

Often governments and corporations need to raise capital for a multitude of reasons. To do this they have several channels available. They can borrow from banks, issue stock or borrow from investors or they can issue debt securities in the form of bonds. Many investors (called bond holders) purchase these bonds and in return, the company gets a lump

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