High Yield Bonds definition

By definition a high-yield bonds is a high paying bond with a lower credit rating than investment-grade corporate bonds. It also has a lower credit rating than Treasury bonds and municipal bonds. The upside of this is that because of the higher risk of default, these bonds pay a higher yield than investment grade bonds.

Based on the two main credit rating agencies, high-yield bonds carry a rating of ‘BBB’ or lower from S&P, and ‘Baa’ or lower from Moody’s. Bonds with ratings above these levels are considered investment grade. Credit ratings can be as low as ‘D’ (currently in default), and most bonds with ‘C’ ratings or lower carry a high risk of default; to compensate for this risk, yields will typically be very high.

Basics of a permanent portfolio fund

The permanent portfolio fund is a type of investment that is made to offer a solid performance whatever of what is going on in the market. Here are the basics of permanent portfolio funds and what they have to offer you as an investor.

Permanent Portfolio Fund

The idea for permanent portfolio funds that you have a mutual fund that could withstand any market conditions. This was accomplished by investing in many different types of securities. Putting emphasis on investing in things that you could find outside of the stock market.

A permanent portfolio school of thought was to invest in an equal proportion of stocks, bonds, cash, and gold. Therefore, the original investment mix was 25% of each type of investment. In today’s conditions the current composition of the fund is 25% precious metals, 10% Swiss franc bonds, 15% real estate and natural resource stocks, 15% aggressive growth stocks, and 35% in government securities such as T-bills. In this way investors funds regardless of what happened in the economy feel more secure. Although with this fund you have to expect a slow and steady growth curve. This type of fund has been proven to gain value steadily over time. We encourage you to try it, if you want to create a fund that is somewhat secure and has steady gains as time goes on. At best, you will have an asset that will have paid out some income at the same time have grown in value with a relatively low-risk investment approach that lets you keep your money over the long-term. It sounds very viable especially in these volatile times when the stock market tends to fluctuate and the stability and strength economy is somewhat unsure, the permanent portfolio may work for you.

How to invest during a financial crisis – The Jim Rogers way

An interesting interview with Jim Rogers is up at Businessweek.com

So you reject the advice about diversified portfolios?

Diversification is something that stock brokers came up with to protect themselves, so they wouldn’t get sued [for making bad investment choices for clients]. Henry Ford never diversified, Bill Gates didn’t diversify. The way to get rich is to put your eggs in one basket, but watch that basket very carefully. And make sure you have the right basket.
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Stocks to Watch – Boeing

Interesting artcle at cnn.money.com regarding Boeing stock. With the added input of two analysts.

NEW YORK (Fortune) — Boeing stock has plunged as air travel swoons globally. This year is expected to be only the third time air traffic has declined in its 50-year history.

Boeing Shares have dropped 60% since their peak in October of 2007, and earnings have sunk 50% in the first quarter as airlines delay or cancel orders, Boeing begins to cut production, and investors worry about Pentagon spending cuts.
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Berkshire Hathaway Shareholder’s Weekend Notes

Here are some note/bulletpoints from the Berkshire Hathaway shareholder’s weekend

  • Buffett is in favor of buying Wells Fargo
  • Warren Buffett says Berkshire Hathaway is not interested in buying newspapers in the United States “at any price.” He says the changing media environment now means newspapers “have the possibility of unending losses” and he does not “see anything on the horizon that causes that erosion to end.
  • Warren Buffett revealed the company had “got a chance to buy some corporate bonds very, very cheaply a few months back.”
  • Warren Buffett says there are no plans for a buyback of Berkshire Hathaway stock right now. Continue reading “Berkshire Hathaway Shareholder’s Weekend Notes”

Investing in Tech – Microsoft (MSFT)

Microsoft may not be recession-proof but it turned in a strong performance in a year most companies would like to forget.

Profits jumped 25.7% to $17.7 billion on revenues of $60.4 billion as the software giant offset declining sales of its Windows operating system with increased revenues from its server and tools software products.