Delojozafado

Looking to Invest in Bonds in Troubled Times? Caveat Emptor!

The author mentions closed end funds. I will put forward some of the likely suspects. The WIA has significantly outperformed the TIP over the last 6 months in both yield and price. Same great TIP bonds at a 3% discount to what TIP sells for. As far as general bond funds be wary of the otherwise very good BDF or ICB as they hold a lot of longer term maturities. If you were to own them you should have some TBT in place at a purchase price target below $44.50. Despite all of "their " efforts "they" are just not able to knock the TBT down below $45 and keep it there for more than a day. As an alternative to BDF & ICB one might consider DUC on dips below $11. The "DUC" of death has mostly utility issuances of mostly med term maturities. One other medium term fund is MIN and it is diversified into foreign developed nation sovereign debt. It has shown a great deal of resilience in terms of maintaining it's share value in a fairly narrow range. The LQD has also of late become of interest. IT recently increased the distribution to reflect the fact of what real interest rates now are for liquid investment grade debt. As the price dips on Market sell off days to a yield of +6.5% against it's share price it may be a good bet. The convertibles are interesting and the TSI looks pretty good, but the NGZ like the MIN gives you international diversification. You can see the relative strength of NGZ in a market like yesterday where it was very strong as against the very dangerously 48% leveraged AVK. Just as you get inflation protection with TIP investing and market participation with converts, you may want to improve your chances of holding on to your principle in Bonds with some small positions in AGQ,DGP, and PTM. The precious metals are all in a buying range right now. They could knock off another 10% from here but long term are very strong, just as is the TBT. If you like you can also look into some mega trend Convert preferreds as in CHK-PrD or ADM-PrA. While not of such strong long term trends the HCN-PrG & AES-PrC are also also of interest on pull backs.