bond investing posts
FeedPosted Feb 27th 2009 4:35PM by Steven Halpern (RSS feed)
Filed under: Forecasts, Newsletters, Mutual funds, ETF Investing, Commodities, Oil, Stocks to Buy, Housing, Recession, Financial Crisis
With stock prices near decade lows and fear at generational highs, many market participants are looking for harbors in the storm -- and turning their eye from high risk growth stock opportunities to what are generally more conservative income ideas.
For those looking to broaden their holdings to include yield-generated income, we turned to a dozen leading newsletter advisors who in turn offered a wide variety of income-oriented ETF and fund favorites.
Yes, fixed income holdings have their own risks. But in general, a diversified portfolio -- balanced between stocks and bonds -- has proven a more defensive posture. In addition, the selections in this report are funds and ETFs; as such the investments themselves are diversified among many holdings.
Continue reading Today's best income ideas: A dozen experts look for yield
Posted Jan 12th 2009 4:00PM by Steven Halpern (RSS feed)
Filed under: Newsletters, Stocks to Buy, Best Stocks for 2009
This post is part of a special annual report -- Top Stock Picks '09 -- in which TheStockAdvisors.com asked 75 leading newsletter advisors to select their favorite investment for the new year.
"My top pick is US Cellular 8.75% Senior Notes (NYSE: UZG)," says Carla Pasternak. In her income-oriented advisory service, High-Yield Investing, she says, "The best thing about them? They are bonds, but trade like stocks."
Pasternak explains, "Their total interest payments of $2.1875 a year dished out quarterly are legal obligations, not discretionary payments like stock dividends.
"As senior notes, too, investors can rest assured that UZG's interest payments have a prior claim on the company's assets, ahead of any common or preferred share dividends, if the issuing company were to run into trouble.
"Not that I consider it likely United States Cellular (NYSE: USM), America's sixth-largest wireless firm and the name behind these bonds, is any danger.
Continue reading Top Stock Picks '09: US Cellular Senior Notes (UZG)
Posted Oct 22nd 2008 10:10AM by Steven Halpern (RSS feed)
Filed under: Major movement, Newsletters, Mutual funds, Stocks to Buy, Recession
"Like other US Treasuries, Treasury Inflation Protected Securities (TIPs) have virtually no credit risk," explains fund expert Mark Salzinger.
The editor of The No-Load Fund Investor adds, "Unlike other US Treasuries beyond short-term bills, however, TIPs also have no inflation risk." Here, he looks at an EYF based on TIPs.
"Twice a year, TIPs' principal valuis are adjusted upward by the amount of the increase in the Consumer Price Index Urban (CPI-U), thus protecting their holders against increases in inflation.
"The total return of the bond equals its yield plus the change in principal value based on inflation, changes in real interest rates (published interest rates minus inflation) and supply-demand in the market for TIPs.
"TIPs' yields are lower than those of regular Treasury sercurities of similar maturities. That's one of the disadvantages of TIPs.
"The other is that any increase in principal value due to the biannual inflation adjustment gets taxed every year as if it were received income.
Continue reading Fund expert offers tip on TIPs
Posted Jul 31st 2008 11:33AM by Steven Halpern (RSS feed)
Filed under: Newsletters, Mutual funds, Stocks to Buy
"After reviewing financial statements and data on dozens of closed-end funds, we identified MFS Intermediate Income Trust (NYSE: MIN) as one of my top picks," says income expert Carla Pasternak.
In her High Yield Investing, she explains, "You won't find many closed-end funds with a better mix of high-quality bonds than MIN's AA+ rated portfolio." Here's her look at this fund that offers an estimated 9.8% yield.
"MFS Intermediate Income Trust holds U.S. and foreign developed government bonds; it offers a discounted share price and a steady income stream powered by healthy earnings from portfolio assets.
"And like other bond funds, it can be affected by rising interest rates, but its diverse portfolios should help steady returns.
"You won't find many closed-end funds with a better mix of high-quality bonds than MIN's AA+ rated portfolio. The fund invests in AAA-rated U.S. Treasuries and agency bonds, foreign debt of developed countries, and high-grade corporate bonds.
"Management insulates the portfolio assets from currency volatility by holding them in U.S. dollars. A low duration of 4.4 years limits sensitivity to changing interest rates. The fund also may trade derivatives and use leverage to boost returns.
Continue reading Income expert eyes AA+ portfolio