Ditching stocks for U.S. bonds
May 31, 2012 8:16 AM
Jobs statistics show hiring remains low; concerns over Spain's fragile economy and investors ditch stocks for U.S. government bonds. Ashley Morrison reports.
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- You can also make money in the junk bond market and there are many investors who will pull up stakes here.They call them junk bonds because individually these are shaky companies who will give you high interest rates(8-10%).Rather than buying 1 bond with a coupon rate I would go to a reputable firm and purchase a junk bond fund. Since the fear of these items is a default, a known fund may have 500 issues so it is almost impossible for the entire fund to fail. The greater the risk the greater the return.Do not invest in Junk Bond securies until the economy is strong.Never go into these investments in times like these
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- Ashley, when the the economy started to slow, I swapped most of my equities for for bonds. There are many varieties of single issues or funds. Just like blue chip stocks they are absolutely safe bond issues. I go for government bonds, municipal bonds, zero coupon bonds and similar, stocks with good income meaning dividends.What is important there is an inverse ratio between price and rates.You should look at the ten year treasury rate.That is how you can get an idea of what your dividend rate will turn out.Bonds will give you income,stocks for growth.
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