Bond Investors

A bond investor buys a debt instrument, which is essentially a loan to a corporation or government. In exchange for this money, the bond investor receives an interest rate. Bonds pay at fixed intervals and for a fixed period of time and are therefore called “fixed-income securities.” The interest rate that the issuer pays is called a “coupon.” At maturity, the full amount of capital is returned to the investor. The two main criteria of bond investors for buying a debt instrument are duration and credit quality. Duration represents the length of the investment; credit quality is how strong the borrower is and how able they are to repay the full amount of debt.


Risks in the bond market continue to pile up quickly. Bond investors need to be very careful. They need to be very vigilant about their next step. June was the first month since August of 2011 that U.S. long-term bond…

In 1980, the total outstanding debt in the U.S. bond market was about $2.5 trillion—this included municipal bonds, Treasury bonds, money market instruments, corporate debt, and asset-backed securities. Fast-forward to 2012, and the U.S. bond market stands at $38.13 trillion—an…

The Federal Reserve has yet to announce when it will start to increase interest rates in the U.S. economy. Meanwhile, there seems to be disagreement within the central bank’s affiliates regarding its loose monetary policy. The President of the Federal…

The bear market is doing an excellent job with investors’ attitude towards the stock market. We can see it in the market’s performance... So far this year, the S&P 500 has gained 4.6%—its best January start in 15 years! Market…

A stronger sign of inflation headed our way… Late last week, the U.S. Treasury sold $15.0 billion in 10-year Treasury Inflation Protected Securities (more commonly known as “TIPS”) at a negative yield (interest rate), for the first time in its…

Three major trends in the financial markets, all from which investors can make money, continue their development this morning… Trend #1: Rising long-term interest rates. The 10-year U.S. Treasury hit a yield of 3.6% Friday morning. My forecast calls for…

In each PROFIT CONFIDENTIAL editorial, we quote an older edition of this e-letter, usually an exact prediction I made and the forthcoming outcome. You’ll find this daily in a section below entitled, “What He Said.” Today’s “What He Said” paragraph…