I previously revealed a strategy that allows income-oriented investors to capture high dividends while hedging on the risk of equity exposures. This is another variation on that same theme. In this case, the play is on safe bond dividends.
Two recent events should have lit up brightly on every investor’s radar screen: The recent downgrade of the US credit rating status by the S&P to AA from AAA, and the Fed’s subsequent reaction to market panics by pledging to maintain historically low interest rates at least through 2013.
The reaction of the US government and the world bond markets to this downgrading have been interesting. …
(Read full article in my recent posting at seeking alpha)
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