Tuesday, April 13, 2010 - 7:27 AM

Looking for Yield? Try Agency Bonds [TheStreet]

Chad Stephens, manager of the RidgeWorth U.S. Government Securities Ultra-Short Bond Fund(SIGVX), says bonds issued by government-backed agencies are a safe place for investors seeking extra yield.

Bonds still face interest rate risk. Stephens thinks the Fed will start hiking rates by the end of the year.

KenBDG4,048 posts since
Nov 29, 2009
Rep Points: 106,905

1. Tuesday, April 13, 2010 - 8:59 AM

Bonds are NOT a wise investment now. When interest rates stat going up, the value of bonds you hold goes down accordingly. That is, bonds are pretty well peaking in value now and are only going to be going down -- substantially. You stand to lose your shirt if you get into bonds now.

me1004235 posts since
Jan 16, 2010
Rep Points: 1,430

2. Tuesday, April 13, 2010 - 12:52 PM

The best you can hope for with agency bonds is 3% for a 5 year bond. That's horrible. You're better off with CDs.

Quovatis11 posts since
Feb 4, 2010
Rep Points: 60

3. Tuesday, April 13, 2010 - 4:42 PM

The time to buy bonds is when people are dumping them (as in back in late 2008) when prices are dropping. When bonds are costing more than face value, that is NOT the time to buy bonds. Unless you believe that rates will drop further down would be the only reason to buy them now.

Anonymous963 posts since
May 9, 2010
Rep Points: 1,819