My Fourth Quarter Picks

I called the bottom of the junk bond market at the end of January 2009. Since then, the discounted bonds that I recommended making up my portfolio rose 33.62% while the Dow rose from 8,000.86 to 9,712.65 or 21.4%. Most of the bonds that I recommended in January have matured and I purchased bonds to take their place. The new bonds mature in 1 to 2 years. Here are my Fourth Quarter Bond picks as well as their recent prices, Yield to Maturities, and Ratings. The bonds on my recommended list are;

ALLIED CAP CORP NEW SR NT 6.625% 07/15/11
Price $832.50 YTM 19.455% Rating B1/BB
Total Return $359.75 for 21 Months.

AMERICAN GEN FIN CORP INCOME NOTES 4.050% 05/15/10
Price $871.98 YTM 17.39% Rating Baa3/BB+
Total Return $151.65 for 7 Months.

DOLE FOOD INC SR NT 8.875% 03/15/11
Price $100.00 YTM 8.875% Rating Caa1/CCC+
Total Return $125.02 for 17 Months.

HILTON HOTELS CORP NT 8.250% 02/15/11
Price $800.00 YTM 11.875% Rating NR
Total Return $310 for 17 Months.

MBIA INC NT 9.375% 02/15/11
Price $993.50 YTM 9.477% Rating Ba3/BB-
Total Return $131.50 for 16 Months.


These bonds are for investors. I am a believer in a “Buy and Hold” strategy for IRA and small speculators when purchasing stock. This way, a speculator can accumulate stock on a regular bases at a low price. As time goes by, the stock appreciates in value and the speculator sells years later at a high price. I still believe in purchasing Ford Motor Company at $7.50 or below.

Who should take advantage of this?

As most of you know, in the past 30 years more and more experience people have lost their jobs. Many of them have 401k or pension plans with tens of thousands of dollars in them. Many people are suddenly put in a position where they must decide in a matter of days where to put this money. I prefer to create self directed Individual Retirement Accounts (IRA) for this cash so that the money can be tax deferred until retirement. I also recommend buying discounted corporate bonds such as the ones I recommend to make money as well as protect capital.

Where should you go to create your IRA?

To create a self directed IRA where corporate bonds can be purchased, I suggest using a brokerage firm that deals in corporate bonds. The world is full of such brokerage firms. I use Zion’s Direct 1-800-524-8875 because of their large inventory of discounted corporate bonds. They are on the internet at: https://zd.zionsdirect.com/