My Sunday Washington Post Business Section column is out. This morning, we look at investing in fixed income and some of the ways investors are trying to obtain some yield.
The print version had the full headline Desperate for yield? Review the basics of investing in bonds while the online version is the more basic The basics of owning bonds.
It is an overview of the basic factors impacting bonds, as well as a review of other yield instruments.
Here’s an excerpt from the column:
“Buyers of the 10-year Treasury are agreeing to lend Uncle Sam money for a decade and receive a piddling interest payment of 1.5 percent. That is barely above inflation in the depressed environment, where price rises have been modest. It is reasonable to expect higher inflation in the future, but when that will finally hit is anyone’s guess.
Given these low, low yields, perhaps it is time to revisit some of the basics about owning bonds, bond funds and ETFs (exchange-traded funds). We can also explore what alternatives exist regarding yield and generating income.
The most important thing you need to know about bonds is that they are essentially loans to some entity. As such, there are three main elements to any bond . . . “
No art work this week.
click for ginormous version of print edition
The basics of owning bonds
Washington Post, July 22 2012
Desperate for yield July 22 2012 (PDF)