Because there are so many stocks that are NOT paying dividends and also going down people are looking for a safe investment that will pay a decent return and also won't lose money. Slowly folks are beginning to think about bonds of which there are all kinds.
Cities and counties have been issuing bonds. There are the school bonds for building new school buildings and the local district issues these. How about building a new sewage plant? Yes, a special bond could be used. If you live in a big city there could be bonds for that new stadium or maybe an aquarium or a huge theme park. Toll roads are a big money maker, aren't they?
The businessmen who want to build these attractions get the permission of the local government to issue them and they have the blessing of the city council or whoever and then go out and collect your money. These are not what are called investment grade bonds. They rank below the A classification and as a result you, the bond buyer, get a much higher rate of return. Remember this - the higher the rate of interest the riskier is the bond. Of course, if your municipality says this has their blessing than it should be O.K. Right?
The citizens of Denver popped for a new aquarium to the tune of 1.2 million. It was supposed to bring in more tourists and pay for itself with tickets. A fraction of those visitors showed up and now it looks like the project might default. They do not have enough money coming in to pay for the fish food and service the debt. And many toll roads are not getting enough traffic.
The spending spree of local governments has sponsored (not guaranteed) bonds equal to more than $320 billion this year. There are $1.6 trillion in municipal bonds. When the projects don't pay out the local governments can raise taxes to pay the shortfall, can't they? Sometimes they can, but many times they won't. The present default rate is running 10 times its historic norm.
Bonds can be as risky as stocks. You must be careful where you invest your hard-earned cash. If you buy any bond other than a U.S. treasury you insist a reputable insurance company insure the bond. Just because the mayor says it is good doesn't mean anything.
One of the safest ways to buy bonds in a no-load bond mutual fund and there are hundreds of them. You can buy as little as $1,000 increments. Your broker will not tell you about them.
If you insist on buying individual bonds you want to know the true net yield, is it investment grade and is it insured. Bonds can be as dangerous as stocks. That is why a mutual fund manager is important, but you still must be in an investment grade fund.
(c) 2005
Al Thomas' best selling book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter to receive his market letter for 3 months at www.mutualfundmagic.com to discover why he's the man that Wall Street does not want you to know.
Airbnb cleaning service Glenview ..Ever notice how behavior in one area of life can... Read More
Never lose money in the stock market again. Yeah, I... Read More
It takes a total mental commitment to the task. It... Read More
Last time we looked at the real performance of the... Read More
Stocks breakout from properly formed bases everyday but many investors... Read More
Everyone who invests in the stock market wants to be... Read More
Question: How does it get better when it gets worse?Last... Read More
Are you one of those many people who dread reading... Read More
Quick, look out the window. It's raining. No, the sun's... Read More
I made my very first investment in the stock market... Read More
Jack and Jill went up the hill to fetch a... Read More
Financial markets provide their participants with the most favorable conditions... Read More
You should ignore analysts on TV, the radio, the newspaper... Read More
It has been said that low cost or even free... Read More
How many people went to a cash position this week?... Read More
On Monday, November 25, 2000 Investor's Business Daily listed on... Read More
Look back over the years and try to remember how... Read More
It has fallen upon the consumer to make our economy... Read More
When is a dividend not a dividend?The latest thing "conservative"... Read More
Picture one of those clubs where only the real heavyweights... Read More
Exchange Traded Funds (ETFs) are a group of passive index... Read More
Mutual funds were moderately successful in creating a presence in... Read More
I have watched my cat play with a bag of... Read More
Have you bought any mutual funds this year or late... Read More
One of the main reasons many of us get into... Read More
efficient cleaning crew Highland Park ..Refuse is a serious issue in any society, about as... Read More
I made my very first investment in the stock market... Read More
Many people would like to diversify their portfolios to expand... Read More
When you become interested in a stock or mutual fund... Read More
We've all heard of the stock market and probably have... Read More
Ever have one of those sample boxes of candy? Each... Read More
For the last 12 years we have seen the Japanese... Read More
The big bad bear is stirring again. So far he... Read More
What is the Series 7 Exam? If you... Read More
I feel that an investment strategy in the stock market... Read More
AS BUILDERS BEGIN WORK ON THE FREEDOM TOWER in New... Read More
Mutual fund investing is a lot like Thai cooking. Everyone... Read More
The stock market is very unstable at this time going... Read More
When is a dividend not a dividend?The latest thing "conservative"... Read More
Mutual funds were moderately successful in creating a presence in... Read More
Stock investment advice is easy to find. Do you get... Read More
Maximizing a stock market investmentThere are several factors an investor... Read More
After the publication of the first part of this two... Read More
During the month of January the Dow Jones Industrial Average,... Read More
Mutual funds by definition are a mixed bag of stocks,... Read More
Peter is a professional trader, Paul is not. Peter has... Read More
You probably know the story of Sherlock Holmes and the... Read More
If you are going to be a winner in the... Read More
Options trading can increase the profits you make when trading... Read More
Let's assume that you want to make some serious money... Read More
Stocks & Mutual Fund |