Thursday, March 6, 2008

Let's Bond

For a stable long term investment consider high quality corporate bonds. High grade corporate bonds can yield anywhere from 4-9% depending upon length of maturity and quality of the company. For example a bond from McDonalds maturing in 2018 has a coupon rate of 5.35%. No risk to principle if you keep the bond until 2018. McDonalds has little chance of ever defaulting on a bond. If you the principle before 2018 then you could lose some principle. Only buy bonds if you intend to hold them to maturity.

One more example, GE offers a bond that matures in 2017 with a coupon rate of 5.25% Again with GE there is little chance of a default. For a secure, stable return consider high grade corporate bonds.

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