Bonds posts
FeedPosted Oct 8th 2009 5:20PM by John Jagerson (RSS feed)
Filed under: Other issues

Earnings season seems to be off to a promising start. So far
Alcoa (NYSE:
AA) cut enough costs to get back into profitable territory and same-store retail sales are up collectively for the first time since last year.
This sounds good and the major market indexes are up on the news reaching mid-September's resistance levels. A break here could turn into another extension of the rally. However, should investors be moving more heavily into stocks?
Continue reading How fragile are stock returns?
Posted Sep 18th 2009 4:30PM by John Jagerson (RSS feed)
Filed under: Other issues, Market matters

High yield is a nice way of saying "junk" when talking about bonds. These bonds are issued by firms who must pay a higher interest rate when raising capital than those companies that issue bonds that qualify as investment grade. Those higher interest rates are attractive to investors and lately demand for high yield bonds has led to a very nice rally in junk bond funds like the
iShares High Yield Corporate Bond Fund (
HYG).
Today, HYG is finally pausing in its uptrend as investors take some profits off the table across the bond market. Investors are concerned about the fact that the Treasury plans to flood the $112 billion worth of new debt into the market next week. That will be a record auction amount and could put temporary downward pressure on bond prices.
Continue reading High yield bond funds take a break
Posted Aug 13th 2009 2:40PM by Sheldon Liber (RSS feed)
Filed under: Getting started, Johnson and Johnson (JNJ), United Parcel'B' (UPS), Wells Fargo (WFC), Serious Money, Stocks to Buy, Best Stocks for 2009, Olin Corp. (OLN)

Money market accounts and certificates of deposit are safe, but they provide very little return on your investment. This fact, and the invigorated stock market, provoked one of my bankers, Dobrinka, at the local Santa Monica Wells Fargo branch, to ask for advice on how I would invest $25,000 if I was just starting out.
This is a common question although the starting point in terms of cash varies. It certainly makes a difference how old the person is, their general knowledge about investing and finance, and the particulars of their financial statement.
Here is what I suggested sticking to regular themes I have written about before and broadly speaking would be a conservative approach emphasizing safety, diversity, liquidity, dividends and the potential for growth far exceeding cash in the mattress or in a money market account. I also think that it is important for beginners to educate themselves so my suggestions include an educational aspect.
Continue reading Serious Money: What to do with $25,000
Posted Jun 4th 2009 9:20AM by Connie Madon (RSS feed)
Filed under: Competitive strategy
There are strange goings on in the markets these days. The latest catch 22 is the rally in junk bonds. Bloomberg reports that "The lowest rated companies that may not be able to afford avoiding bankruptcy and exchanging or buying back debt at the lowest prices on record." That is pushing the prices of junk bonds up in the biggest rally ever. The flip side is that this practice is the higher prices are crowding out some of the neediest companies
Here are some examples:
- The Blackstone Group LP (NYSE: BX) owns Freescale Semiconductor Inc. In March, Blackstone wiped away $1.9 billion of Freescale's debt by offering investors 32 cents on the dollar in loans. Since then the securities have tripled to 54.1 cents on the dollar. Now, the chip maker still has $7.5 billion of debt and would need to do it at much higher prices.
Continue reading What is causing the rally in the junk bond market?
Posted May 20th 2009 3:20PM by Sheldon Liber (RSS feed)
Filed under: ETF Investing, Personal finance, Serious Money, DJIA
During the last eight months, with the market bouncing up and down, there have been times when I did not look too smart buying stocks through it all.
Of course I looked the most foolish on March 9, when I wrote the prophetic Nostradamus was a punk! Have we reached bottom? Some folks were commenting that they were staying in cash until the DJIA dropped to 5,000. Today that looks highly improbable, even if the market gives something back over the next few months.
There must be some readers that also have contrarian instincts and made good money this year. This is a reminder to take something off the table. It's time to book some gains. We all did great in 1999 and 2000 only to give it all back and then some. Don't let that happen to you again!
Continue reading Serious Money: ETF that's better than cash
Posted Apr 15th 2009 1:40PM by Zac Bissonnette (RSS feed)
Filed under: General Motors (GM)

A committee of
General Motors (NYSE:
GM) bondholders hoping that the United States government will continue to bailout the company without wiping them out is pleading for mercy: "GM bondholders are not a collection of Wall Street banks," the committee wrote. "Many of these bonds are owned by average citizens, who purchased them to support their own retirement and college expenses and other critical needs."
Continue reading Buy a junk bond, get a bailout
Posted Mar 17th 2009 5:00PM by Alex Salkever (RSS feed)
Filed under: Headline news, Housing, Small business, Recession, Comic Relief, Financial Crisis

With "Bonus Rage" burning up the media wires, people actually seem to be forgetting about the really grim news out there. Stocks may be running up, but bonds and the credit markets show no such optimism, as the ever grim
Tyler Durden at Zero Hedge points out. Since bond investors tend to be smarter than stock investors, this is an ominous warning sign in the face of the huge four day rally underway.
Continue reading Doomsday Scenario: Bonds hate this rally, Russia rearms, LA real estate woes
Posted Feb 22nd 2009 9:40AM by Connie Madon (RSS feed)
Filed under: International markets, Bad news, Recession, Financial Crisis
If you are sitting in your office or at home thinking: "What am I going to do next? The economy is getting worse by the day," you are not alone. For the first time in a generation real fear has gripped the nation. This was reflected in the action of the markets since the beginning of the month.
Global markets are at multiyear lows, as is the U.S. Dow Jones Industrial average. The S&P index sank below the psychological 800 level.
This past week, attention was focused on central and eastern Europe, where the recession is gaining momentum on the downside. Now add to this mix the banking crisis. Investors are fearing a lack of solvency among the big international banks. Credit default swaps are rising, with Korea hitting a three-month high. Then you have the crisis in Japan, where GDP is falling by an annualized rate of 12.7% in the past three months.
Continue reading Markets sink, unemployment soars -- What do I do next?
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