As you probably know, the conventional wisdom on Wall Street is that investors will sell stocks in favor of bonds when yields reach an attractive level. So, it’s not surprising that many pundits blamed the DJIA’s triple-digit decline on rising bond yields. Let’s put that belief to a test.
Will Rising Bond Yields Send Stock Prices Tumbling? Read More »
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.
Just When You Thought Bonds Were Safe Read More »
Riddle me this: Why would anyone ever buy junk bonds or a junk bond fund? Before we get to the answer, I would like to point something out that seems to be a given, but that astonishingly few investors think about: bonds are debt instruments, so investing in bonds means investing in debt, governmental or corporate.
How to Find Junk Bonds That Don’t Stink Read More »
Anytime a hurricane or other natural disaster is predicted to strike, it causes widespread uncertainty in the stock market. Although the people who are in the path of an upcoming storm place their focus on staying safe and protecting their homes and businesses, investors around the country pay closer attention to their investments in an
Catastrophe Bonds Read More »
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
A Brief Introduction to High Yield Bonds Read More »
Editor’s Note: In today’s interview Alex Daly talks with former Reagan budget director David Stockman about Austerity, the FED, housing, debt, the economy, the stock market, bonds, and much more. Here are a few of David’s excellent quotes from the interview: [The FED is] being run by people who are clueless as to how to get
Interview with David Stockman Read More »
2012 has been a tough year for people around the world. With the European debt crisis and high unemployment rates in the U.S., it is hard to decide where to invest to keep your money safe and to earn some interest without getting yourself into financial trouble. It is a fact that in order to make money
Where to invest in 2012 Read More »
Students with a small amount of savings on the side might want to consider putting their nest egg in secure investments so that it grows over time. A savings account from a bank will hardly accrue any interest, and a CD will often yield little more. The obvious choices left are stocks and bonds, two of
A Student’s Guide To Investing in Bonds Read More »
Company Bonds Company bonds have been a hot topic in many financial publications including the Wall Street Journal lately, though you might not be familiar with the term. Allow me to offer a brief primer on the topic. Company bonds (aka corporate bonds) are a type of debt security issued by companies to raise capital. A
What are Company Bonds? Read More »
There are many ways to invest and you need to understand all the tools at your disposal in order to invest safely and wisely. In this article Steve McDonald explores an area of the market that has been ignored in recent years but should be better understood by investors today in order to protect their
How to Invest for Safety Read More »
