When is it a good time to buy high yield bonds?
Answers: High yield bonds are also called junk bonds. WIth the current economy likely to head into a recession, it may be wise to hold off on buying now until the economy stays to grow again.
If you're looking to personally invest, buying now will maximize yield over time. After all, your money is just sitting there, representing lost opportunity cost.
If this is a theoretical question, you should buy bonds when interest rates are highest, at the peak of the economic cycle. If you think the economy has peaked recently, you should buy bonds then. =)
Maybe when the yield spread is wider between treasuries and junk bonds, like above 6 percent. Thats usually when the risk return trade-off is the best Individual junk bonds have a high risk of default. A high yield bond mutual fund would probably be the best way to go. When combined in a fund they have lower risk.
What is the lowest stock price for BP gas from the recent past five years?
We all know the gas prices are... unsophisticatedly crazy. A stock today for BP gas is $70.23! If I understand correctly. What is the lowest stock price for BP gas from times gone by five years? Winner gets five points!Answers: It closed at $35.37 on January 27, 2003.
~36.00 within 1/24/2003
This is almost exactly 5 years ago, BP is going steadily up.
Is it better to leave an investment alone in the stock market or pay down(not off) a house payment at 6.75%?
Answers: This is a complicated subject. In general you will find that the interest rate on the mortgage is usually higher than what you can invest the money for, so at first glance, it may be best to pay off the mortgage. You can deduct mortgage interest on your taxes, but you have to pay taxes on your investment interest, so the tax aspect is usually a wash. However, you do not have to pay tax on interest in a retirement account, which sometimes may make investing the money a higher interest rate than the mortgage rate minus the tax deduction. I doubt however, even with the tax savings you will do better investing in any interest-bearing account, compared to paying off a 6.75% mortgage.
You can also invest in stocks or stock mutual funds that average 10% a year (not 8.6% as the other person said. This can be highly risky however, as some years you will lose money instead of making money. I personally would pay down the mortgage, but if you are a risk taker, you might want to put some in stocks.
Read these links for more discussion:
http://www.smartmoney.com/home/living/in...
http://money.cnn.com/galleries/2007/real...
http://money.cnn.com/galleries/2007/real...
http://articles.moneycentral.msn.com/Ban...
I choose stock market because I believe I can do well with picking stocks,, remember that too compare the two, dont forget that you can write off mortgage interest, so at 25% tax rate, you would have to earn more than 9% in the market, I use www.thewallstreethunter.com for my daily market news and updates...
Good luck
Historically, the stock market offers a return of about 8.6% per year before inflation. However, this 8.6% is not guaranteed, and unless you have your money in an index fund, extremely difficult to consistently achieve. I'd advise you to pay off as much of the house as you can at 6.75%. You can get a guaranteed return of 6.75%, essentially, if you do so. If not, putting your money in an index fund like spyders can minimize your exposure to market risk and adequately diversify your portfolio. Its your call, risk/reward. Personally, the risk free 6.75 rate looks pretty good to me, as T-bill rates are hovering around 4%. Basically, you could get 4% risk free if you were an external investor, but because of your unique situation, you could get 6.75% with your mortgage. Free money!
Peace.
=)
In this environment, pay down the house and get out of debt as quick as you can. The economy is a coin toss right now. Anyone can lose their job. People are living up to their eyeballs in credit. When one domino falls, they all fall down.