Robert Caldwell

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Where to Invest for Returns? Junk!

September 13th 2010 05:06

With the recent run up of stocks I'm starting to wonder if this rally will continue or if we will continue to be range bound and drift lower.

This uncertainty has led to me to search for better investment opportunities outside of stocks. My next stop of course was bonds. Unfortunately everyone seems to be thinking the same thing as yields on treasuries are almost non-existent. Also the run up in prices means there is little room for them to grow and a whole lot of downside risk. Last week treasuries lost 2.5%. Normally this wouldn't be terrible but that is almost an entire year's worth of yield.

I quickly took treasuries off my list of investment choices. I then started looking and High-yield or (Junk) bonds. These bonds are below investment grade and thus have significantly higher yields. I have no wish in investing in individual companies with a shaky financial standing. Note how I said individual companies. I recently have been looking into ETFs that specialize in High-Yield (Junk) bonds. The most recognizable of them is the SPDR Lehman High Yield Bond Fund ticker symbol (JNK). As of this writing it has a dividend yield of 9.3%! How's that for yield? Also as the economy improves the shares of this ETF should increase as yields come down.

Robert
Have some thoughts? Comment away!

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Who said this recession would be quick?

July 3rd 2009 23:02

When the financial crisis took hold of the U.S. economy many economists forecast that this recession would be long and deep yet I still hear people talking about a quick recovery. COME ON PEOPLE.

The good news is just better than expected bad news let alone real good news. Consumer spending is still low by historical standards, unemployment is now at 9.5% nationally.

People are saving and preparing for the worst not going out and buying new TVs and cars. People are trying to figure out how to put food on the table. A 10 year old boy wanted to help his mom out so badly he tried to shoplift a loaf of bread and a box of Mac and cheese. He resorted to stealing because his mom had no money to feed her family.

These are not seeds of recovery and right now all we can hope for is that things don't get worse. I truely feel sorry for those less fortunate than I. Everyone deserves food and shelter regardless of how much money they have.

I'm fortunate to have a full time job working in retail that pays less than $10.00 an hour.

Robert

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Will this rally continue or is it full of false hope?

March 24th 2009 00:34

Today we had a HUGE rally accross the board. people are pointing to positive economic indicators and also the treasury's plan to deal with toxic assets as the reason for this recent rally.

A weak dollar has given many commodities a boost including oil which is now above $50.00 a barrel again. If your looking for a long term investment invest in oil it won't stay low forever. Also it provides a hedge against inflation. Lastly oil prices are at historic lows compared to other inflation hedges such as gold.

Where are the markets heading now? If we hit Dow 7000 I think we could quite possibly be off to the races and have a sustained rally. I however believe we will have a pull back from today's huge push upward. Some profit taking should be considered as we have had a huge run up and a pullback is becoming more likely.

Just some food for thought.
Robert

P.S. if your looking for more details on the treasury's plan check out CNBC's overview

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A brief year end review

January 6th 2009 23:41

well one thing is for sure. This year has been a roller coaster for everyone as far as finances are concerned. The first part of the year was highlighted with oil prices skyrocketing and the sub-prime market still an isolated incident. A gallon of gas at the pump reached $4.00 a gallong during the summer.

Then came the financial meltdown filled with bankruptcy and bailouts. Many financial stocks have now become penny stocks as the companies behind them struggle to survive. The auto industry was and still is on the brink of collapse

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What a debt hangover! $14 Trillion in debt

November 16th 2008 08:31

Well I was reading some articles over at CNBC and came across an article that showed just how far U.S. consumers over extended themselves in debt.

US Consumers Hit By Credit Crisis, And Everybody Pays
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Have We Hit a Bottom?

November 11th 2008 04:34

Will the bottom we reached on October 10th hold? In the short term yes. We don't have our entire financial system on the brink of collapse. In fact the system as a whole seems to be recovering.

1. Libor rates have dropped some

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Market Expectations for Election Day

November 4th 2008 13:25

Here we are on election day. Who's gonna win? Personally I think Mr. Obama is going to come away with the win. What does this mean for the market? In the long term I'm not so sure.

However I do believe that today and tomorrow we will see a jump in the Dow Jones and other indexes regardless who wins. This is because we will have more certainty of where the market is heading

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Where's the market heading next week? Not a clue!

November 3rd 2008 02:30

I've got to say I have no idea where this market's heading. Fundamentals have been thrown out the window. Some stocks are getting killed for no reason. We have hedge funds liquidating positions because investors are making a record number of redemptions. This has created a vicious cycle of downward pressure on the market in general. October 31st was the the fiscal year end for many mutual funds which also created a lot of downward pressure as these funds sold shares at a loss for tax purposes.

After all of this you would think that shares have nowhere to go but up. Right? Well we still have this upcoming week which is chalk full of economic data which should give us a clearer picture of the state of the economy. Most importantly the employment data due at the end of the week

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Who I am

November 1st 2008 09:17

Hi there and welcome to my blog. My name is Robert and I'm currently studying Political Science at UNC (University of Northern Colorado) I'm also minoring in economics. I'm starting this blog because I want to talk about our economy with others and to get feedback as well.

With the Stock Market plunging and many financial institutions on the brink of bankruptcy its hard to be upbeat about the economy. However I do have some good news! Were actually faring better than our European counterparts these days. The U.S. dollar has been strengthening across the board. This is because people actually think the dollar is a good investment. The underlying asset of the Dollar is of course the U.S. its self. Foreigners actually think our economy is doing better than most. I know from our perspective this is hard to believe but its true

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Comment by Robert Caldwell
on Totally Useless Information

September 13th 2010 05:57

I about died laughing at a few of these. Great post!

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Comment by Robert Caldwell
on Same-sex marriage - Why do you care?

November 21st 2008 09:00

I couldn't have said it any better myself. Why do people care so much about who marries who? Absolutely ridiculous!

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Comment by Robert Caldwell
on What a debt hangover! $14 Trillion in debt

November 20th 2008 22:56

fortunately the banking business is learning from its excesses. sub-prime mortgages are REALLY hard to come by these days and in the future look for people decreasing debt all over. The U.S. has a savings rate of around 1%. Most economists see that rising to 5-7% in coming years.

Thanks for the comment!
Robert

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Comment by Robert Caldwell
on The Media's One Way Street

November 16th 2008 19:20

Well for once I can agree with you on the "hate crime" issue. Last I checked anytime someone hurts another on purpose its usually because of hatred or in the defense of someone hating you.

EQUALITY every victim and aggressor should be treated equally.

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Comment by Robert Caldwell
on Recessions and Depressions

November 11th 2008 04:43

We haven't officially been declared as being in a recessions. However keep in mind that what news casters say is we are in the midst of a recession. When a recession is declard the actual date of the recession is when negative GDP started. With this said I don't think those saying were in a recession are being irresponsible a depression is a little ridiculous though. Lastly part of news casting is predicting and expressing opinions.

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Comment by Robert Caldwell
on Consolidation For 10 to 15 Years???

November 3rd 2008 08:47

I agree completely. This quickly turning into a value and buy and hold investor's market. I guess I'm one of the few people looking for stocks to buy.

Robert

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Comment by Robert Caldwell
on Andrew Tallman & Financial Realities

November 1st 2008 13:49