As I explained earlier, a bond investor can make money in this market by buying short term bonds of companies that are in serious trouble. Since then, the stock market has stabilized and you can pick a stock now for long term and make a lot of money. That is if you pick a stock that will go up. Even at the beginning of a stock bull market, I still would stay with Junk or non-investment grade bonds. As my bonds purchased last year matured, I bought the following bonds.
HILTON HOTELS NOTE 7.200% 12/15/09 does not have a rating. The Yield to Maturity is 19.12%. This issue matures in 9 months. This bond is not rated. The price is $866.60.
FORD MTR CR CO CONTINUOUSLY OFFERED BONDS RETAIL 5.450% 06/21/10. Yield to Maturity 36.303%. This issue matures in 14 months. Yield to Maturity is 36.602% with a price of $719.10. S&P rating of this bond is CCC+.
DOLE FOOD INC SR. NOTE 8.875% 03/15/11 matures in 23 months, with a Yield to Maturity of 17.38%. The price of this S & P rated bond is B- is $865.
REVLON CONSUMER PRODUCTS CORP SR. NOTE 9.500% 04/01/11 matures in 24 months, with a Yield to Maturity of 28.225%. The price of this S&P rated bond is CCC+ is $730.
Since I had to change strategies selling longer term bonds and buying shorter term bonds, I had a bad last 6 months. I only made 15% return. But that is still better than the negative returns that other people made. Just with the bonds above, I should make between 20% and 30% over the next two years. I am not greedy. I can live with that.
Total(Min) Bonds in Inventory
Price YTM Moody/S&P
318(20) American Gen Fin Medtm Sr Listed 4.625 of 05/15/2009 98.215 26.008% Baa2/ BB+
30(10) American Gen Fin Medtm Sr Listed 5.375 of 09/01/2009 95.250 18.715% Baa2/ BB+
14(1) American General Finance Listed 3.875 of 10/01/2009 95.000 15.468% Baa2/ BB+
Here are three more bonds that you may want to investigate. American General Finance has a bond that matures on May 15, 2009 giving 26.008%, September 1, 2009 giving 18.715%, and October 1, 2009 giving 15.468%. All three bonds have an S&P Rating of “BB+.” Zions Direct, a member of SIPC has these bonds in its inventory. The May and September bonds have to be bought in lots of 20 and 10 bond per trade. The October bonds can be purchased one at a time.
