Login

Log In

Enter your username and password below

Bonds

Republicans Hatch Plan That Puts Muni-Bonds in Jeopardy

Republicans Hatch Plan That Puts Muni-Bonds in Jeopardy

As the U.S. debt nears $20 trillion, Republicans on Capitol Hill just hatched a plan to help pay down the debt — they’re threatening to cut the tax-exempt status of municipal bonds. But will Trump’s plan to boost spending on infrastructure spawn a new investment opportunity?

Long-Term Bonds Are a Huge Value Trap

Long-Term Bonds Are a Huge Value Trap

As income-oriented investors continue to scramble to find decent yields, many are being enticed towards long-term bonds. Don’t be one of them. While the yields are tempting enough, they’re still not very attractive – and in the current market conditions, it’s a value trap that’s bound to bring losses in the long run. As a...

New ETF Offers Investors a High-Yield Haven

New ETF Offers Investors a High-Yield Haven

In early 1998, Russia was hemorrhaging foreign exchange reserves. A number of factors were feeding into worries about Russia’s debt sustainability – including the Asian financial crisis in 1997, a decline in the price of crude oil, political instability, and widening fiscal deficits. Emergency loans from the International Monetary Fund and World Bank did little...

Executing the Sleeping Beauty Strategy

Executing the Sleeping Beauty Strategy

With the U.S. stock market near its all-time high, where do you go for decent income investments? Emerging markets are less overvalued, but solid income investments among emerging markets companies are fairly rare, and withholding tax bedevils their yields. So the best strategy for an income investor today could very well be the “Sleeping Beauty”...

Valeant Exposes Junk Bond Danger

Valeant Exposes Junk Bond Danger

Drug company Valeant Pharmaceuticals International Inc. (VRX) is teetering on the brink of default. It has $31 billion in debt, of which $13.5 billion is from the junk bond markets. The company serves as a lesson in the dangers of short-term strategies and excessive leverage. Both faults have been common among large issuers of U.S....

Exercise Caution With Emerging Market Bonds

Exercise Caution With Emerging Market Bonds

As readers will know, I’m generally bullish on emerging market stocks. They provide exposure to the more rapid growth in those markets, and I believe them to be undervalued today. Thus, income investors looking for bond opportunities may feel that emerging market bonds are also an attractive alternative. Indeed, they offer better yield than good...

Exxon Mobil (XOM) to Lose AAA Credit Rating

Oil Giant to Lose AAA Credit Rating

Standard & Poor’s rates the creditworthiness of roughly 1,300 publicly traded, U.S.-domiciled companies. And only three of these companies are rated “AAA” – the highest tier. The first two probably won’t come as a surprise. Microsoft Corp. (MSFT) and Johnson & Johnson (JNJ) have enormous streams of stable cash flows. And both of these companies...

Funny Money Is Death to Income Investors

Funny Money Is Death to Income Investors

Income investors have now suffered for nearly a decade under a regime of near-zero interest rates. Last week, European Central Bank President Mario Draghi intensified his version of this policy by lowering the ECB base rate to minus 0.4% and announcing a system of loans to banks at negative interest rates. For income investors, this...

Don’t Be Fooled by the Short Squeeze

Don’t Be Fooled by the Short Squeeze

On November 18, 2015, KaloBios Pharmaceuticals Inc. (KBIOQ) announced that Martin Shkreli and a consortium of investors had acquired more than 50% of its outstanding shares. The stock, which had closed at $2.07 that day, traded above $10 the day after the announcement. The next day, shares rose above $23 and closed at $18.45. The...

Use Mining Company Bonds to Boost Your Income

Boost Your Income With Mining Bonds

The precious metals mining industry pays minimal dividends at best. Of course, this is reasonable given its cyclical nature and horrendous recent cash flow. It also means income investors haven’t benefited from the recent increase in the prices of gold mine shares, which were buoyed by an 18% rise in gold prices. (For those who...