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Which Is Safer: Investment Grade Corporate Debt or Government Bonds?

IEric hit the homerun ball in this article. Investment grade corporate bonds purchased from August through November 2008, with maturities of one to five years, especially those of double or tripple A banks and insurance companies in comparison with US treasuries of any maturity, looking back in retrospect at the end of December would have been the best play for conservative investors. The yield to maturity ranged between six and one-half to over nine percent. The ratings on these bonds with few exceptions have remained high investment grade and their values have risen considerably in last four to five weeks. When the masses run in fear to treasuries and ignore investment grade bonds, they will surely lose, especially when they invest in maturies longer than a few months and and hold. Though yields have fallen considerably during the past month, investment grade financial corporate bonof medium duration are still a sound investment for conservative investors who do not trade.

Corporate Bonds Haven’t Been This Cheap Since 1932

So true, especially if one buys bonds coming due in one to four five years which are not spooked by risk of high inflation likely three years out and beyond.