| 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! |
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