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.

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.

Overcome the Six Obstacles
Knowing how to manage risk is one of the prerequisites of financial literacy. Once you’ve fulfilled all the prerequisites and become fully literate, does financial freedom follow? Not necessarily. Certain personal obstacles can prevent even the most financially literate from developing abundant wealth. Continue reading Six Traits to avoid in order to become a better investor

1. Better mix of investments. Try to raise that bond stake for safety, and boost foreign-equity exposure for growth.

2. Simplify. Reduce holdings to 10 funds and roll over old 401(k)s from prior jobs into a Roth IRA to make portfolio easier to manage.

3. Invest in index funds. Sell actively managed funds in their taxable account, harvest tax losses, and move to low-cost exchange-traded funds.

There are many misconceptions in investing; whether in stocks or bonds or in building an investment portfolio in general. Carl Richards at Behavior Gap has an interesting article in getrichslowly.org

Continue reading Basics in investing

If you are asking that question you may find this article a bit disconcerting.

IEA slashes forecast for oil demand – again
Agency sees global demand declining by 2.4 million barrels per day in 2009 amid recession.
Continue reading Is it a good time to invest in oil?

Everyone is selling. Recession is on the horizon. Investors are nervous trying to minimize loses. One may panic, but the one who are steadfast will be the one reaping all the profits. It is the time to own recession proof stocks which I’ll tackle in this post.

There are basically two approaches you can do when the economy is on a downturn.
Continue reading Tips in owning recession proof stocks

Although making resolutions to improve your financial situation is a good thing to do at any time of year, many people find it easier at the beginning of a new year. Regardless of when you begin, the basics remain the same. Here are my top ten keys to getting ahead financially. Continue reading Ten Tips for Financial Success

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.
Continue reading Stocks to Watch – Boeing

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