Although they may have a reputation for being the domain of stodgy, well-heeled investors browsing over their portfolios by the fireplace with a cigar in one hand and a fountain pen in the other, bonds have a place in everyone’s portfolio. In addition to allowing you to set aside “reserve” capital for emergencies or stock market crashes, intelligent bond selections can take advantage of changes in interest rates, the underlying issuer’s credit profile, and more.

Kennon-Green & Co. Global Asset Management, Wealth Management, and Investment Advisory

50-Year Maturity Sovereign Bonds in Euros

The Folly of Investing in 50-and-100-Year Bonds

Benjamin Graham once wisely observed that more money has been lost by investors “reaching for yield” than stolen at the barrel-end of a gun.  During periods of anemic interest rates on fixed-income securities, bank deposits, and cash equivalents, a combination of impatience, action bias, and desperation causes savers to do what they would otherwise consider extraordinarily foolish.  

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Eli Lilly and the Insanity of Foreign Taxes

Eli Lilly and the Insanity of Foreign Taxes

I’m going through the corporate bond filings of pharmaceutical giant Eli Lilly just out of curiosity.  They have a huge patent cliff coming up, during which time as much as 40% of their revenue base will be exposed to generic competition.  I wondered what it would do to the risk metrics on the senior bonds so I pulled the Moody’s rating and reading over the figures as I listen to an old 1970s song called Snookeroo.

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Investing in Bonds Tricky Right Now

Investing In Corporate Bonds and Debentures Is a Bit Tricky At the Moment

I spent a big percentage of my day reading indenture documents for corporate debt securities because I was helping someone pick up some additional fixed income investments for a retirement portfolio.  I managed to get my hands on a nice block of high-grade, non-callable debentures from a major packaged foods company with a 4.3% yield-to-maturity on the remaining decade before maturity, but still have a bit of their dry powder left to spend.

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Why Are People Surprised That Savings Bonds Beat Stocks Over the Past 12+ Years?

I’ve noticed an array of articles exclaiming that savings bonds, including both the Series EE savings bonds and the Series I savings bonds, beat stocks over the past ten or fifteen years.  Nearly every time I make my way into one of these essays or news stories, I just shake my head because the surprise displayed by the men and women penning these pieces indicate a complete lack of competence.  Those of you who have any experience managing money or with history immediately know my objective: No asset class, per se, is sacrosanct.  What matters is the price you pay for the asset relative to how much underlying cash it generates.

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General Electric Stock from the 1940s

Stocks vs Bonds vs Gold Returns for the Past 200 Years

I write a lot about investing in stock and investing in bonds over at Investing for Beginners at About.com, a division of The New York Times. There is a reason I tend to be far more favorable to equity investments (stocks) than fixed income investments (bonds) when it comes to long-term investing and why much…

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Kennon-Green & Co. Global Asset Management, Wealth Management, and Investment Advisory