Updated: January 10, 2018
No safe bond pays 10% itself, of course. But it is possible to generate double-digit yields from a portfolio of secure bonds.
The secret is similar to successful dividend investing. Why buy a stock and be content pocketing “only its dividend” when you can have the payout with price upside to boot?
Most income investors are even less thoughtful when they purchase bonds. They fixate on the coupon rate (which these days they are inevitably disappointed with.) They watch their bonds weigh down their entire portfolio, muttering to themselves “at least they are safe.”
Well, sure. But they can be both safe and profitable.… Read more