-->

I'm Buying Bonds... Here's Why You Should Too

Post a Comment
Shield

AN OXFORD CLUB PUBLICATION

Wealthy Retirement

View in browser

SPONSORED

Unknown Kansas Welder Ends Up on Forbes Richest List??

Welder
 

He Didn't Start a Business... Win the Lottery... or Inherit a Fortune.

Instead, He Made a Rare Move Any American Can Follow in Less Than 3 Hours. See His Remarkable True Story Here.

Editor's Note: Today's the day!

If you haven't already signed up to attend The Oxford Club's 26th Annual Investment U Conference on February 26-29, 2024, today is the LAST day you can do so at the early bird price.

As I'm sure you already know (and as you'll see in today's article), Chief Income Strategist Marc Lichtenfeld is a huge fan of fixed income right now.

At this year's Investment U Conference, Marc presented on FIVE different types of investments - including several specific bond recommendations - to capitalize on the high rate environment.

During his presentation, he said, "Right now, we're seeing the best yields in over 10 years"... and yields have only gone up since!

To get more guidance from Marc and discover what makes The Oxford Club such a special community of wealth builders, check out all the details on our 26th Annual Investment U Conference... before the price goes up at midnight!

- Rachel Gearhart, Publisher

I'm Buying Bonds... Here's Why You Should Too

Marc Lichtenfeld, Chief Income Strategist, The Oxford Club

Marc Lichtenfeld

Last month, I suggested that now is the perfect time to buy bonds. This weekend, Barron's agreed, running a headline that said, "Time to Buy Bonds."

While I continue to hold dividend stocks for the long term, lately I've been putting most of my cash to work in fixed income.

Treasurys are yielding more than they have since 2007. Investment-grade corporate bonds - those with very safe S&P Global ratings of BBB- or higher - have an average yield of 6.3%, their highest yield in nearly 15 years.

Meanwhile, non-investment-grade bonds, or junk bonds, are yielding an average of 9%. While these are more speculative than investment-grade bonds, they are still more conservative than stocks - even blue chip stocks.

Here's why...

There's a very key difference between stocks and bonds.

A stock is worth only what someone is willing to pay for it at a given time.

A bond is worth $1,000 at maturity regardless of what anyone is willing to pay for it at any time.

Here's what I mean.

When you buy a stock, the only way to make money on it is to sell it for more than you paid. When you want to sell the stock, you have to hope the price is higher than it was when you bought it.

With a bond, you know what the exact price of the bond will be on a certain future date. On the bond's maturity date, you will receive $1,000 unless the company has gone bankrupt. Barring that unlikely scenario, you will get $1,000, regardless of whether you paid $1,000, $900 or $500 for the bond. You'll also collect interest along the way.

SPONSORED

This Sub-$10 Stock Is Literally Powering the AI Revolution

The internet sent top-performing tech stocks like Broadcom soaring 4,900% in 14 years.

Oracle helped computers go mainstream... and jumped 8,600% in a single decade.

Now it's happening again with the stocks powering artificial intelligence...

And this expert believes one sub-$10 stock is perfectly positioned to reap the rewards.

Details Here

It's important to realize that even if the price of the bond falls while you own it, that won't affect your eventual payout. At maturity, you will be paid $1,000.

So let's say you buy a bond with a 5% coupon that matures on November 1, 2026. Right after you buy the bond, the company posts bad news and the bond drops to $950. A year later, there's more bad news, and the bond market starts getting scared. Your bond drops all the way to $700, which is a big move in the bond market.

As we approach November 1, 2026, the bond's price starts moving closer to the $1,000 mark. On that date, the bond matures and you are paid $1,000. It doesn't matter that the market lost confidence in the bond two years earlier and the bond was trading at a huge discount. The bond will pay $1,000 at maturity no matter what.

The stock market has been a mess for two years. The S&P 500 is up this year, but that's mostly due to seven Big Tech stocks. Most stocks in the market are down... and many are down big.

And this bear market shows no signs of slowing down in the near future.

When you can earn more than 5% risk-free in the short term in Treasurys, more than 6% in safe corporate bonds or even 9% in more speculative bonds and get your money back, you have to ask yourself whether it's worth it to risk your cash in stocks, which historically average a return of 8% to 10% per year but involve much more volatility.

My long-term money is still invested in stocks because I (hopefully) have plenty of time for those stocks to grow. But my funds that I'll need in the shorter term are in bonds right now.

I have a bunch of bonds maturing between now and the end of the year, and I'm excited about the safe income-producing opportunities we have now that weren't available just a year ago.

You rarely hear someone pounding the table on bonds.

I am.

Good investing,

Marc

P.S. Later this week, I'll send you an email containing my most recent bond research. In it, I reveal a way to produce 100%-plus predetermined returns in as little as two years - without having to stomach the ups and downs of the stock market. Keep an eye on your inbox!

Leave a Comment
Investment U Conference 2024 at the Ojai Valley Inn & Spa in Ojai, California, February 26-29, 2024

Get Marc's Top 5 Dividend Stocks (FREE PICKS)

One Potentially Explosive Stock That Alexander Green Just Discovered Has Seen Five-Year 2,000% Revenue Growth, Enjoys 70% Gross Margins and Sports a Debt-Free Balance Sheet, yet Still Trades Under $10. He's Calling It the "Next Great American Super Stock." (Click for Details.)

SPONSORED

HUGE Passive Payouts Every Year...

Woman Holding $100 Bill

I'm not talking about boring high-yield CDs, corporate bonds or blue chip dividend stocks...

And this isn't something that takes a large time commitment or a huge bankroll to get started...

But once you learn the secret of these passive payouts, it could totally change your life.

Check It Out by Clicking Here

Related Posts

There is no other posts in this category.

Post a Comment

Subscribe Our Newsletter