Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Thoughts on bonds of banks like Morgan Stanley & Goldman?
Old 04-25-2012, 11:02 AM   #1
Dryer sheet wannabe
 
Join Date: Apr 2011
Location: Macedon
Posts: 24
Thoughts on bonds of banks like Morgan Stanley & Goldman?

Nowhere to go for safe income these days. Forget about CDs, treasuries, or AAA rated corporate bonds. But bonds issued by these A rated banks yield up to 4% for 3-5 years. Thoughts?
__________________

__________________
Bdroc is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 04-25-2012, 11:05 AM   #2
Thinks s/he gets paid by the post
 
Join Date: Nov 2011
Posts: 2,370
I've purchased some. Too big to fail.
__________________

__________________
GrayHare is online now   Reply With Quote
Old 04-25-2012, 12:53 PM   #3
Recycles dryer sheets
ScaredtoQuit's Avatar
 
Join Date: Jan 2007
Posts: 194
I'm looking at them too. In my opinion they are NOT too big to fail. (after Lehman) However, I feel the ratings are a little more accurate than they were 5 years ago. These companies have solid balance sheets and good earnings. Overall, a rating of single A is pretty good. The reason they are paying as much as they are is because of the uncertainty of the litigation surrounding these companies. My consolation is that time and time again I've seen potentially bankrupt level litigation settling for very reasonable amounts. (Anybody remember the tobacco company settlements?)

Yes, I will probably invest in either Goldman or Morgan Stanley (or both) in the near future, however, I will hold my aggregate exposure to about 1-1/2 to 2% of my portfolio.
__________________
ScaredtoQuit is offline   Reply With Quote
Old 04-25-2012, 02:34 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,481
Having done some research on bond yields a couple of weeks ago as I was re-doing my bond allocation, it was striking that the yields on corporate bonds by financial issuers were significantly higher than similarly rated industrial issuers. There seems to be some disconnect between the risk of those issuers in the eyes of the bond market compared to the rating agencies. I thought the disparity was interesting though.

For those who have regularly invested in corporate bonds in the past, is this disparity normal or a more recent phenomenon?
__________________
pb4uski is online now   Reply With Quote
Old 04-25-2012, 06:07 PM   #5
Thinks s/he gets paid by the post
obgyn65's Avatar
 
Join Date: Sep 2010
Location: midwestern city
Posts: 4,061
I stick with CDs, and munis mainly.
__________________
Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
obgyn65 is offline   Reply With Quote
Old 04-25-2012, 07:27 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,481
Just after my prior post I noticed an article in today's WSJ where Moody's is allegedly considering some significant downgrades to some banks: 3 notch downgrade to Morgan Stanley, 2 notches for Citigroup, J.P. Morgan Chase and Goldman Sachs and one notch for BoA.

Seems to me a bit ridiculous in that the banks are stronger than before so it seems that Moody's has been asleep at the switch if they are considering multiple notch downgrades today.
__________________

__________________
pb4uski is online now   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 07:46 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.