![\"bonds_currency\"](\"http:\/\/www.taipanpublishinggroup.com\/images\/web\/Taipan_Daily\/100x100\/bonds_currency.jpg\")
When I was a kid, I used to play soccer in the alley behind our house with the neighborhood kids. It was a narrow lane, so we didn’t have much room. And the goals were pretty small, too. We made a rule that we wouldn’t play with goalkeepers. No one would ever score if someone could just stand in front of a two-foot goal.<\/p>\n
More often than not, one kid would end up drifting back and standing in front of the tiny goal. Boy would we get mad!<\/p>\n
But that kid wasn’t really aware of what he was doing. He knew the rules, he just defensively kept sliding back.<\/p>\n
I think investors are starting to do the same thing with government bonds.<\/p>\n
Consider this:<\/p>\n
Treasuries prices rose on Friday, helped by stock losses, Fed purchases of Treasuries, and relief U.S. inflation data did not come in above forecast.<\/em><\/p>\n Government bond yields have been back on the rise… But U.S. Treasuries aren’t the best place to park your money.<\/p>\n A 10-year note will give you 3.187%. It’s true — government bond<\/a> returns have been climbing from bottom-of-the-barrel lows, but you can still get a better return from other areas in a lot less time.<\/p>\n Of course, investors are willing to pay a lot of money for a small yield if they feel their money is safe from any decline, but even government bonds<\/a> aren’t safe from drops in value anymore. In the fourth quarter of 2010, U.S. Treasury-issued bonds handed investors a 2.7% loss, and in the first quarter of this year, they added another 0.1% loss to the pile.<\/p>\n U.S. inflation alone could wipe out any gains you might get from investing in Treasury bonds.<\/p>\n So here are three specific areas that will give you a better return than the 10-year Treasury note.<\/p>\n Nine out of the top 10 holdings of the PowerShares High-Yield Dividend ETF (PEY:NYSE<\/a>)<\/strong> have a higher yield than the 10-year Treasury note. The lowest dividend of the bunch is 4% and the highest is 6.8%.<\/p>\n Of these top 10 holdings, there are four companies that have performed well over the past year:<\/p>\n These four companies have dividends of 6.8%, 5.6%, 5.5% and 4.9% respectively. Not too shabby when you consider that their share prices have been climbing.<\/p>\n Choosing any of these companies would give you an automatic return that’s higher than the 10-year Treasury note… in a single year.<\/p>\n CDs can have different time frames. Some have a three-month term, and others have a five-year term. Each is different, and each has its own return. They can give investors access to lots of different kinds of investments, from commodities to stocks to currencies.<\/p>\n The flexibility of a CD is very attractive to traditional bond investors, and a special kind of CD offered by EverBank should have you drooling.<\/p>\n It’s called a MarketSafe CD. This kind of CD protects your principal investment. That means you can’t lose money. But the upside potential is much much greater than the 10-year Treasury note yield.<\/p>\n EverBank offers two different MarketSafe CDs — one based on five different metals and the other based on 10 different commodities. They both have a term of five years. And you have to buy in before June 9, 2011.<\/p>\n They are the MarketSafe Diversified Commodities CD<\/a> and the MarketSafe Timeless Metals CD.<\/p>\n Over the next five years, could commodities lose value? Sure, it’s possible, though not likely. But if they do, then 100% of your investment is protected.<\/p>\n *Editor’s Note:<\/em><\/strong> We firmly stand behind EverBank and their products and think they are a solid way to grow your wealth. But you should know that we also have a business relationship with the company and receive a financial benefit from the sales of this product.<\/em><\/p>\n Another way to beat the tiny 3.187% yield is to invest in inflation-proof stocks<\/a>. These are companies that can pass their higher costs onto the consumer. That means they are riding the U.S. inflation wave instead of being flattened by it.<\/p>\n (Investing doesn’t have to be complicated. Sign up for <\/em>Smart Investing Daily and let me and my fellow editor Jared Levysimplify the stock market for you with our easy-to-understand investment articles<\/a>.)<\/em><\/p>\n This group of companies includes service providers and producers of consumer staples. They also include blue chip companies. Companies like MasterCard (MA:NYSE<\/a>) <\/strong>and Wal-Mart (WMT:NYSE<\/a>)<\/strong> and even AT&T (T:NYSE)<\/strong>.<\/p>\n Safe Haven Investor<\/em> editor Kent Lucas had this to say about AT&T in his April issue:<\/p>\n It’s a blue chip name. Research has proven blue chip, or higher quality, larger (capitalization) companies tend to do well in inflationary environments. Blue chip companies are often better run with a competitive advantage and an attractive business model that does relatively well compared to lesser companies…<\/em><\/p>\n Simply stated, there is a flight to quality as inflation fears rise.<\/em><\/p>\n If you can find a company that is an inflation-proof stock and a high-dividend stock, you’re really in the money. AT&T is just such a company. It’s climbed nearly 24% in the past year and offers a 5.5% dividend.<\/p>\n Altria Group is in the same boat, if you don’t have any qualms about investing in a cigarette company.<\/p>\n It’s hard to pass over companies like these for pricey, low-yielding bonds.<\/p>\n The point is, drifting back to bonds, just like that kid in the alley during our neighborhood soccer games, is kind of an unconscious reflex.<\/p>\n U.S. inflation is headed higher this year. Even the Federal Reserve has increased its forecast. That could seriously eat away at the ultra-conservative returns that longer-term bonds offer.<\/p>\n There are a number of different opportunities out there that can give you much better returns than the 10-year note.<\/p>\n P.S.<\/strong> News has just hit the airwaves today that IntercontinentalExchange (ICE:NYSE<\/a>)<\/strong> and Nasdaq OMX Group (NDAQ:NASDAQ<\/a>)<\/strong> have taken their bid for NYSE Euronext (NYX:NYSE<\/a>) <\/strong>off the table. This means a big drop in share prices for NYX. I first told subscribers about this company back in September 2010 at our annual conference, and talked about it again in mid-January 2011. At that time, shares were trading for around $33 a share. On Friday, shares closed at $40.89, but opened about $4 lower on Monday. This action hacks any gains made from mid-January in half, and if you’re using a tight stop-loss, you probably got booted out of your position.<\/p>\n If you weren’t using a stop-loss, now might be the time to get out with some gains. This news may ultimately be good for NYX, but in this topsy-turvy trading environment, it’s best to take gains while you can. Do so with NYX.<\/p>\n *Editor’s Note:<\/strong> Safe Haven Investor<\/em> editor Kent Lucas had a lot more to say in his April issue. Subscribers can find the full issue online, but if you’re not a member, you can learn more about Kent and Safe Haven Investor<\/em> here.<\/a><\/p>\n Article brought to you by Taipan Publishing Group. Additional valuable content can be syndicated via our News RSS feed<\/a>. Republish without charge. Required: Author attribution, links back to original content or www.taipanpublishinggroup.com<\/a>.<\/em><\/p>\n {jtagstpg} {authorstpg}<\/p>\n Other Related Articles:<\/strong><\/p>\n When I was a kid, I used to play soccer in the alley behind our house with the neighborhood kids. It was a narrow lane, so we didn’t have much room. And the goals were pretty small, too. We made a rule that we wouldn’t play with goalkeepers. No one wou…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-21155","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/21155","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=21155"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/21155\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=21155"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=21155"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=21155"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}High-Dividend Stocks<\/h3>\n
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Safe CDs<\/h3>\n
Inflation-Proof Stocks<\/h3>\n
Combine Strategies<\/h3>\n
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