We are half way through May and there has been no great correction or sell off. I’m expecting this trend to continue as valuations appear not to matter as investors have no better place to put their money than in equities. Buffet says that bonds are a fools game, even for the retail investor. Do you agree? I’m completely out of bonds in my 401k and have no plans to return in the short term.
Tuesday morning David Tepper was on CNBC talking stocks. For those that don’t know he was the most successful hedge fund manager in 2012 earning over $2.2B. He could not be more bullish on equities and believes there is little to no risk in the markets right now. When one of the most successful guys on Wall Street talks I listen.
Here are a few investment posts I’ve been reading lately…
First, some dividend stock analysis:
The Dividend Guy – Mattel is fun
Dividend Growth Stock Investing – Purchasing Lorillard
Passive Income Earner – Canadian Western Bank
Financial Independence Journey – Safeway Dividend Analysis
Matt Krantz from USA Today – The Whirlpool restructure
Dividend Income Updates:
My Own Advisor – April 2013 Income
Dividend Mantra – Income update
Passive Income Earner – May Income
General Financial Posts:
What is important to know about financial literacy? Financially integrated gives a good overview of why this is so important.
The 1500s give more insight into their weekend with Warren Buffet. Its a fun read for all investor types.
I totally agree with WB that bonds are junk as an investment. Look at it from the perspective of value. If you buy bonds for 10k for 30 years at 2% interest (for example, I do not know what they yield today). The value of your 30 year bond will be the same in 30 years – 10k (unless you buy really deep below par) and then you would be receiving your 2% interest every year.
Compare the same with a stock. If you buy for example JNJ for 10k, then in 30 years your 10k may double or even triple and you will be receiving 3% dividend in the first years. In 30 years your yield will be around 20% on your original investment. This will never compare to bonds and bonds will never beat stocks although there are many fools out there who will be telling you otherwise.