Category

High Yield Stocks

Bonds

This Looks Like the Setup for a Bond Bloodbath

More than $12 trillion of global debt is now in negative-yielding territory – a move directly at odds with the argument that the global economy is healthy.

The same is true of the drop in U.S. Treasury yields. Real per capita GDP has risen by a mere 1.3% annualized since 2009. Is it any wonder that yields have plunged and the Treasury curve is flattening?

While I expect the market to recognize the truth about inflation sooner or later, there is every possibility that yields will move lower before they move higher due to tepid growth and a flight to safety in the event of a sharp market sell-off (as we saw after Brexit).

Analyst Christopher Wood, I think, said it best: "[T]he fact remains that the intensifying global move into negative bond yields this year is plain scary…But what is also scary about the gathering lurch into negative territory…is that it is the sort of parabolic move or 'spike' which to technical analysts often signals the approaching end of a long trend."

A little more than a year ago, we saw a sharp reversal in German 10-year bund yields when they dropped to around 10 basis points and then spiked to around 1%, leaving traders nursing sharp losses. Post-Brexit, 10-year bunds are trading at negative yields, pushed lower by flight-to-safety buying and expectations that the European Central Bank will continue to monetize the economically moribund region's debt.

This looks like the setup for a bond bloodbath.

Unfortunately, some investors are walking right into the crossfire...

Market Crash

The Single Best High-Yield Play Is Paying More Than 5% Right Now

There are lies, there are damned lies, and then there are corporate credit bulls. Should a corporate credit bull assure you that the sun will rise in the east tomorrow morning, get verification from a Société Générale analyst before you consider acting on the information.

One of the credit bulls' most infamous (and, unfortunately, popular) lies is that "Corporate America is flush with cash." This is dangerously misleading.

It is true that a small number of companies, primarily tech giants, do have large, healthy cash hoards, but the average U.S. corporation is not only not rich, but is in fact indebted to a horrifying degree – more so than before the financial crisis.

In fact, right now, just 50 companies – the top 1% of all U.S. corporations ­- control half the cash on the S&P 500. The other 99% of companies are in terrible shape, leveraged to the gunwales. They are toxic and liable to default.

That's bad news for buy-and-hold investors, and even worse for bondholders, but I'm going to show you how to make a killing on the best debt out there...

Income investing

The Best High-Return Investments for Your Portfolio

Low-risk, high-return investments have become scarce in the low-interest environment that followed the 2008 financial crisis.Nearly seven years of zero-interest rate policies by the U.S. Federal Reserve returns have dragged down returns on all interest-dependent investments to the point where they're almost not worth the bother.

But the need for income-producing high-yield investments has not gone away.

Here are three categories with the best prospects...

Investing Tips

Two Stocks Offering High Yields and Profits

It was the spring of 1985, and I was in my second year as a reporter for The Record, a small weekly published in my home county an hour north of Baltimore.

A state-chartered thrift, Old Court Savings and Loan, failed – spotlighting all sorts of unseemly behavior about the institution's insiders, as well as folks who "did business" with it. The collapse – which resulted in 35,000 depositors having their accounts frozen (some wouldn't be paid back until the 1990s) and cost the state of Maryland millions of dollars – also highlighted the dark side of financial regulation.

For an aggressive cub reporter like me, the collapse was indoctrination by fire. I was introduced to the "land flip," where a single piece of property was sold three or four times in a single day – with each transaction adding 50% or more to the land's assessed "value."

And I learned about the changing culture of the once-staid banking and thrift industries...