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U.S. Treasuries are trending higher right now as investors look toward bonds as a way to make money. With the stock market in turmoil, and returns falling in that investment vehicle, many are turning to the bond market. CNN Money reports on the decision by some to engage in the U.S. bond market:

Finding little in the way of return on investment in other markets, investors have placed conservative bets on the bond market. Recession fears and credit crisis anxiety have sent stocks falling in eight of 11 sessions thus far in November. Likewise, bonds have risen in seven of 10 sessions. …

Bonds may continue to rise for the rest of the week, which will bring a number of other economic indicators that are expected to be equally as disappointing. Investors likely will continue to buy up bonds as a safe-haven investment as stocks look for a market bottom.

With the U.S. heading for recession (or already there), investors are starting to look for instruments that are offering any return — even the relatively paltry return of government debt. But they are banking on safety. Government debt is considered amongst the safest of investments, and with worried investors, it is no surprise that bonds are finding popularity.

However, as demand for U.S. Treasuries grows, the yields will slip. Already bond yields on the 10 year note have dropped to 3.63% from 3.66%. And as more people demand them, it is likely that the yields will fall further. As far as your investment portfolio is concerned, it might not hurt to add some of these safer investments to help bring some balance — and some gains.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.

Right now, with the stock market struggling, many people are worried about investing in riskier assets. As a result, there has been recent interest in U.S. government bonds. Treasury investing has been on the rise, since it is considered a “safer” move than stock investing. However, things are changing rapidly.

Debt auction boosts supply of U.S. government bonds

One of the essential rules of the market is that, theoretically, supply and demand sets the price. U.S. Treasury notes have been in demand, so they have advanced. But the other side of the equation is about to come into play. $64 billion in debt auctions are expected this week, and that means supply is about to be inflated. Bloomberg describes these effects on the desirability of U.S. government bonds:

“Treasury investors are wary of supply,” said Jane Caron, chief economic strategist in Burlington, Vermont, at Dwight Asset Management Co., which oversees $70 billion. “There will be a lot of supply coming down the road, and the government is very active in intervening in the markets. As a Treasury investor you have to be cognizant of their activity.”

Is now the time to dump your stocks?

Many people are viewing the current stock market troubles as an excuse to dump stocks. But without Treasury investments to turn to, many of them are doing little more than cutting their losses and pulling out. This could be a mistake down the road when the market recovers (as it is likely to do). Instead of relying entirely on share price to make a decision about keeping a stock, Talk Stock Trading recommends that you also look at the dividends:

Even if prices are dropping the dividends may not be.  Search for dividend yields.  A dividend yield equals the company’s annual dividend divided by the price of one share of stock.  The dividend yield changes as the price of one share changes.  So now that prices are moving lower dividend yields are moving higher.

Whether you invest in bonds or in stocks, now is not the time for rash action. Rather, it is a time for reflection and making solid decsions with sound reasoning.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.

Tags: stock market, stock market news, investing blog, U.S. government bonds,
economy, investments, debt auction

There is an old saying about the stock market: “Buy low, sell high.” And for many, now is the time for just that. Indeed, there are plenty of so-called “vulture investors” out there right now, waiting to pounce. Stock Market Funding reports on how things are playing out for these investors:

NY Times reports even before the ink dries on a proposed $700 billion bailout for the financial industry, Wall Street players have begun jockeying to be the first ones to snap up distressed investments on the cheap. As they try to make sense of how a government bailout would play, vulture investors are combing through balance sheets of possible targets that could run into trouble if banks start calling back loans to businesses and the economy worsens. …

They are preparing for a field day for deals, not only in the financial industry, but in the industrial, retail and other sectors where the flagging economy and tight credit will push more companies to the brink.

You don’t have to be a vulture investor to take advantage of the climate, though. Measured, thoughtful investments made now can yield good results down the road. Considering value stocks and companies with good fundamentals that are likely to recover is good bargain-hunting sense.

Others are considering funds that are meant to take advantage of pooled performance. Index funds are rather popular right now, since you can get more for less, and — over time — the market generally gains. But for such a strategy it is necessary to have a long term outlook. We’re talking an outlook of 10 to 20 years in order for such a strategy to work well.

Still others are hedging with commodities and using gold to try and prevent inflation from eating away all of their assets.

Are you employing any strategies to maximize your investments right now?

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.

Tags: stock market, stock market news, investing blog, index funds,
economy, investments, vulture investors