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-- the year winds down let's focus on helping you make some money in the new year shall wait and you've probably heard a lot about a possible bond bubble.
But -- next guest says there are still plenty of places the play if you need to make -- a part of your portfolio.
Russell -- -- senior markets editor for Smart money.
And joins us now -- Thanks for joining -- thank you for having me I am I love the peace -- for those of you shame on you know who you are who don't subscribe to Smart money.
Tell us where we can make some money in bonds next year -- -- first talk about how there is a bond bubble it's true.
A lot of bombs are in trouble particularly when you're talking about.
Treasury bonds now worried about the federal government going under you worried that the bombs that you bought or only paying two or 3%.
A year from now and -- 45%.
And your cycle that 23%.
So that is the problem is -- legit problem -- world that that we know that.
He can't just run away for the bond market because he might need that steady income.
So there are some places you can and there's more than a 100000.
Bonds he's like every I mean it's unbelievable how big the -- we're talking about a thirty trillion dollar.
Market for for -- so there are places to look for better values of one of the places.
That we think is a decent value is -- high yield corporate bonds -- these of these happy.
The thought of you say high yield I thought they'd just say John.
Bad credit your borrowing from bad credit quality companies right but if it's bad on a relative basis when you look at.
Even -- -- a lot of high yield companies.
They're not they're not going bankrupt either and these things used to be great deals a year and a half -- where you get paid 1520%.
A year on the -- You're still getting eight or 9%.
Which is a pretty good deal and the risk of these guys the faulting his.
Is pretty low mean there's still risk out there but the -- risk of it as low as lower.
Particularly because you look even -- consumers are having really bad credit problems.
On the corporate side corporations their balance sheets are much better shape than they were two years ago and we're showing our viewers a chart of one of them there's funds for everything right and this is one of the funds the buffalo high yield -- -- that invests your letting them.
-- the company that's right it's very difficult for an ordinary investor to god and trying to cherry pick individual high yield bonds unless they do a lot of their own research.
But someone like the buffalo high yield fund and there are a lot of -- -- mutual funds out there specialize in going after these bonds.
And and hopefully mitigating some of that risk for you let's talk about municipal bonds right sixty minutes doing a feature on a couple of welcome to the party sixty minutes by the way we've been talking about a for more than a year.
How pension problems are starting to drag down municipalities.
That said according -- your research Russell there are still some good.
Muni bond books that's right not all -- -- no -- now and remember even if the Muni bond world really has a terrible situation we're talking about.
You know a couple hundred places that will go anywhere in law lets see Jersey Illinois author.
California Michigan Ohio.
Yes but there are a lot of other sates states cities and towns that issue.
Debt all time and -- risk of them going under is very low and particularly look at some of these what they're called high yield municipal bonds these are places that issue debt like.
Airports and some hospitals and some other places which are paying better than treasuries and some cases you get if you buy the bond outrage you're getting a tax deduction.
Tax deduction right now.
So these are also kind of areas to look at you know grant to the Muni bond.
We -- that are always there never has -- yeah but still on the levels -- one of the ones you you don't like it highlighted is -- -- -- high yield -- fund in HMA we get our show for you being a few weeks ago by the way we did not having -- you're gonna recommend that if that's.
People think it was and I don't know -- -- you if you did this I nearly -- how do you find new.
Why pick that than being high yield in this case -- they have out long long history of looking at.
High yield municipal bonds and -- of balancing risks vs reward.
The fund manager there -- -- again.
A long long experience in the high humanist and quickly if you think that Wall Street will turn around as it already has started to do and volumes of brokerage firms will go back up.
There's a bond fund that invests in financial firms that you like that so you look at the -- the end TP intermediate.
Term bonds on these guys -- Are investing in bonds.
Of the cantor Fitzgerald's and the -- the world these may not be household names for the auto market for middle market people there -- -- to grow our growing.
And there there are bonds pay more than your bulge bracket Wall Street firms.
But again there there -- the risk of these kind of medium size firms is pretty low.
And that paid decent return Russell Pearlman thank you very much appreciate it thank you -- -- -- happy new year and if you missed any of those names they're available Smart money this month and also what's that I presume that's right boss.
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