Income investors, are always looking for new and different alternatives to the staid municipal bonds and utility stocks. One interesting alternative is the Minibond. This is a bond that is traded, just like a stock, on the New York Stock Exchange or American Stock Exchange for around $25 per share. They are almost like preferred stocks except that they pay interest instead of dividends and they usually have a specific maturity date. Sometimes they are referred to as PINES (Public Income Notes) or QUIBS (Quarterly Interest Bonds) or QUICS (Quarterly Income Capital Securities) or QUIDS (Quarterly Income Debt Securities). There are even a few that are issued as Perpetual Debt or PDs, which means that there is no maturity date.
The advantages of Minibonds to the issuers are that the interest is deductible to the corporation (unlike dividends on preferred and common stocks, which are not deductible).
The advantages to the investor are first, that the bonds are more secure than preferred stocks (in other words, if the corporation goes out of business, the bonds are generally paid off first before the preferred or common stock). Second, the Minibonds (with the exception of the perpetual debt bonds) have some limited protection against inflation versus preferred stocks in that if interest rates go up after purchasing them, their value will drop; however the par value (usually $25) will be paid back at maturity on the Minibonds. Whereas, preferreds have no maturity. The third benefit is the small denomination, especially when looking at a $2,000 IRA investment. A fourth benefit is that since they are traded like stocks, there is more liquidity than buying or selling a $5,000 bond. However, these are still very illiquid investments. Most have a very low daily volume.
An example is the AT&T Inc. 6.375% Senior Note (ATT), which currently yields 5.9% and pays quarterly. Another is the Viacom, Inc. 6.85% Senior Note (VNV), yielding 6.5%, which also distributes payments quarterly.
WallStreetNewsNetwork.com is working on a list of all the Minibonds, which can be downloaded and sorted. It should be posted in the next few days.
Author does not own any of the above.
By Stockerblog.com
Tuesday, September 07, 2010
Why Silver May Be a Better Investment than Gold
Are you thinking of investing your money into a metal such as gold or silver? There are benefits to both, but silver may be the better way to go.
First, let’s face the fact that the difference between silver and gold prices is vast. Silver, one of the major natural resources, is much more in demand compared to gold, due to its industrial usage. Silver has many uses, everything from circuit boards to coinage to dentistry to cloud seeding to medicine. Approximately 600 million ounces of silver is mined every year, but the demand for silver is around 900 million ounces per year. The United States Mint has limited the amount of coins consumers can buy due to the massive growth in demand for the metal.
There are only a couple of way of producing silver: recycling and mining. The deeper the mine the more expensive it is to extract silver. There are several smaller mining companies which have recently become profitable due to the higher price of silver. The higher price also allows the companies to open new mines that were previously not profitable to develop.
One way investors can invest in silver is through one of the metals ETFs. For example, ETFS Physical Silver Shares (SIVR) has direct ownership of silver. E-TRACS UBS Bloomberg CMCI Silver ETN (USV) is designed to track the entire liquid forward curve of the silver contracts, by buying silver futures.
If you prefer the silver mining stocks, which can give you a better bang for the buck, check out Global X Silver Miners ETF (SIL) that invests in a basket of worldwide companies involved in the silver mining industry. Some of the ETF's largest holdings include Silver Wheaton (SLW), Fresnillo (FNLPF.PK), Industrias Penoles (IPOAF.PK), Hochschild Mining (HCHDF.PK), and Polymetal.
For a free list of silver and gold ETFs, which can be downloaded, sorted, and changed, go to WallStreetNewsNetwork.com.
Author does not own any of the above.
Stocks Going Ex Dividend the Third Week of September
Here is our latest update on the stock trading technique called 'Buying Dividends'. This is the process of buying stocks before the ex dividend date and selling the stock shortly after the ex date at about the same price, yet still being entitled to the dividend. This technique generally works only in bull markets. In flat or choppy markets, your have to be extremely careful.
In order to be entitled to the dividend, you have to buy the stock before the ex-dividend date, and you can't sell the stock until after the ex date. The actual dividend may not be paid for another few weeks. WallStreetNewsNetwork.com has compiled a downloadable and sortable Excel list of the stocks going ex dividend during the next week or two. The list contains many dividend paying companies, all with market caps over $500 million, and yields over 3%. Here are a few examples showing the stock symbol, the ex-dividend date and the yield.
Corus Entertainment Inc. (CJREF) market cap: $1.5B ex div date: 9/13/10 yield: 3.1%
Chesapeake Utilities Corporation (CPK) market cap: $319.6M ex div date: 9/13/10 yield: 3.9%
Community Trust Bancorp, Inc. (CTBI) market cap: $383.4M ex div date: 9/13/10 yield: 4.9%
Digital Realty Trust, Inc. (DLR) market cap: $5.0B ex div date: 9/13/10 yield: 3.7%
GATX Corporation (GMT) market cap: $1.2B ex div date: 9/13/10 yield: 4.3%
The additional ex-dividend stocks can be found at wsnn.com. (If you have been to the website before, and the latest link doesn't show up, you may have to empty your cache.) If you like dividend stocks, you should check out the high yield utility stocks and the Monthly Dividend Stocks at WallStreetNewsNetwork.com or WSNN.com.
Dividend definitions:
Declaration date: the day that the company declares that there is going to be an upcoming dividend.
Ex-dividend date: the day on which if you buy the stock, you would not be entitled to that particular dividend; or the first day on which a shareholder can sell the shares and still be entitled to the dividend.
Record date: the day when you must be on the company's books as a shareholder to receive the dividend. The ex-dividend date is normally set for stocks two business days before the record date.
Payment date: the day on which the dividend payment is actually made, which can be as long at two months after the ex date.
Don't forget to reconfirm the ex-dividend date with the company before implementing this technique.
Author does not own any of the above.
By Stockerblog.com
Unemployment Benefit Claims in the US
A couple weeks ago, the US economy saw a steady decline in the number of claims for unemployment benefits. This news however did little to bring optimism back in the market. The total number of unemployment benefit claims remained at a high level. Many of the unemployed are turning to cash advances online, just to make ends meet. There is a predominant worry among the investors regarding the constantly high unemployment rate of 9.5%. The reluctance among employers to hire workers is also a cause for vexation in the market. Even though the claims have come down by a certain percentage in comparison to the staggering numbers in the previous week, they still seem to be at overwhelming levels.
The first-time claims for unemployment benefits dropped to 473,000 last week for the first time after crossing the 500,000 mark for the first time since November, in the week preceding the week in question. According to Thomson Reuters, the drop that was anticipated was at a modest 490,000.
In a strong economic condition, the weekly claims are usually less than 400,000. However, the latest statistics in job claims reveal that hiring in the economy has been weak. In March 2009, when the recession was at its peak, the claims were as high as 651,000 per week. This has caused many of the currently employed to live payday to payday, constantly worrying about whether they will lose their job.
Nevertheless, on the positive side, this week saw a noticeable decline after three consecutive weeks of increasing claims. The report also slightly allayed fears of the economy falling into a recession for a second time, considering that there were numerous economic indicators that implied a very slow growth rate in the near future.
The biggest hurdle that is keeping the economy from a faster recovery is the fact that unemployment rates are still high. People fearing the loss of jobs in the near future are holding back expenditures, which implies an overall low spending level in the economy. Companies have slowed the hiring process, due to the upcoming financial regulations and various health care reform costs, and because of the uncertainty surrounding taxation. Consumer demand is another worry.
On the unemployment announcement, bond prices didn’t waver much, showing clearly that there was still a great section of the economy that would take time to get comfortable and become positive about the latest report, and would still want to rely on government debt for security. The yield on the ten year treasury notes, which helps in setting interest rates on various consumer loans including mortgages, showed a slight increase from 2.54 per cent to 2.55 per cent towards the end of Wednesday. Long-term bond yields remain at almost the same levels, though at levels which haven’t been recorded since the first quarter of 2009 when stocks hit their lowest of more than a decade. Even though lower interest rates are supposed to stimulate economic spending, it is not happening in the US right now as people are fearing a possible loss of their jobs, so are saving instead.
So what is an investor to do? Investing in quality high yield stocks is a way of dipping your foot in the investment waters. Not just electric or gas utilities, but other industries, which pay CD beating yields. Lists of these investments, including dividend increasing stocks, can be found at WallStreetNewsNetwork.com.
The first-time claims for unemployment benefits dropped to 473,000 last week for the first time after crossing the 500,000 mark for the first time since November, in the week preceding the week in question. According to Thomson Reuters, the drop that was anticipated was at a modest 490,000.
In a strong economic condition, the weekly claims are usually less than 400,000. However, the latest statistics in job claims reveal that hiring in the economy has been weak. In March 2009, when the recession was at its peak, the claims were as high as 651,000 per week. This has caused many of the currently employed to live payday to payday, constantly worrying about whether they will lose their job.
Nevertheless, on the positive side, this week saw a noticeable decline after three consecutive weeks of increasing claims. The report also slightly allayed fears of the economy falling into a recession for a second time, considering that there were numerous economic indicators that implied a very slow growth rate in the near future.
The biggest hurdle that is keeping the economy from a faster recovery is the fact that unemployment rates are still high. People fearing the loss of jobs in the near future are holding back expenditures, which implies an overall low spending level in the economy. Companies have slowed the hiring process, due to the upcoming financial regulations and various health care reform costs, and because of the uncertainty surrounding taxation. Consumer demand is another worry.
On the unemployment announcement, bond prices didn’t waver much, showing clearly that there was still a great section of the economy that would take time to get comfortable and become positive about the latest report, and would still want to rely on government debt for security. The yield on the ten year treasury notes, which helps in setting interest rates on various consumer loans including mortgages, showed a slight increase from 2.54 per cent to 2.55 per cent towards the end of Wednesday. Long-term bond yields remain at almost the same levels, though at levels which haven’t been recorded since the first quarter of 2009 when stocks hit their lowest of more than a decade. Even though lower interest rates are supposed to stimulate economic spending, it is not happening in the US right now as people are fearing a possible loss of their jobs, so are saving instead.
So what is an investor to do? Investing in quality high yield stocks is a way of dipping your foot in the investment waters. Not just electric or gas utilities, but other industries, which pay CD beating yields. Lists of these investments, including dividend increasing stocks, can be found at WallStreetNewsNetwork.com.
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