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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
|
0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| More |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Bonds: Great for Companies, but Not So Much for Investors |
CNBC.com - May 20, 2011 - By Jeff Cox
Just because companies are utilizing extremely advantageous conditions to issue debt at breakneck speed, that doesn't mean investors ought to get on board.
What's good for those companies—low borrowing costs and a receptive market—is not necessarily good for investors, particularly those looking for a payback on the risk they take to own the debt.
In many cases, then, investors hunting for yield might be just as well buy dividend-paying stocks rather than paying top-dollar for corporate debt.
"The whole interest rate game just scares me," says Nadav Baum, executive vice president at BPU Investment Management in Pittsburgh, Pa. "I would much rather own the pseudo-debt or buy these big dividend-paying companies that act like surrogate debt."
Several cross-currents are working in the debt space that make the choice for debt issuers fairly easy but more difficult for debt buyers.
Large companies such as Google [GOOG 514.69 -9.34 (-1.78%) ], Norfolk Southern [NSC 70.98 -1.28 (-1.77%) ] and Walt Disney [DIS 41.11 -0.39 (-0.94%) ] stepped into the bond market recently, and have been part of a larger trend that has seen corporate issuance in 2011 far eclipse the previous year.
These are companies that hardly need the cash but are taking advantage of the low rate environment to build positions.
US companies have issued $147 billion in investment grade debt this year, with 10 percent of the total coming in this week alone, according to Dealogic. Through April, companies globally had issued $335 billion in investment grade debt, far outpacing the $250 billion for the same period in 2010.
The reason for the flurry of activity is both the existence of low financing costs and the reality that the trough for interest rates has probably come and gone as the Federal Reserve ends its monetary intervention.
Once the central banks start backing away from its quantitative easing program, rates are likely to drift higher and prices will move lower.
Investors not holding bonds to duration—as is the case with most of the hugely popular bond funds in the mutual and exchange-traded markets—could get stung.
For the complete article.
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| BondsOnline Advisor |
Income Security Recommendation January 2013 Issue.
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