Bond Bailout
It seems that the waters are getting murkier and murkier for us young investors. Where were the good old days of buy low, sell high? In an environment where stocks go up and down more than my G.P.A, it’s a huge leap of faith to attempt investing.
For the first time in recorded history, the S&P 500 has reported an overall loss in every single constituent, the mighty Berkshire Hathaway fell to a lowly $73,677.30 per stock mid-Friday and Ford has fallen to 4.3% of it’s value from ten years ago.
In such a hectic environment, bonds provide a safe haven. With the Treasury yielding a 5% return, and the price of the bond trade rising— with still much room to rise—it promises to be both a short-term fix and a long-term investment.
Interestingly, though, junk bonds appear to be showing greater value. The average rate of return offers 20%, a significant rise over the Treasury bonds, and increasing bond trade prices. For short-term lookouts, they still offer a viable option. Take a look at T. Rowe Price High-Yield, which has yielded 8.05% in the past 3 months.
Perhaps it’s time to move away from the stock market. But greater reward means greater risk.
Recent Comments