The following is an excerpt from Chuck Hughes' The Fail Safe Now Financial Program

 

Fixed income investments should be a part of every investor’s portfolio. Fixed income securities have performed well since the historic ‘Great Bull Market’ began in the stock market in 1982. While the stock market produced its greatest gains in history during the 1982 to 2000 bull market, US Treasury Zero Coupon Bonds (‘Zeros’) out-performed the S&P 500 Stock Index by more than a six to one margin over the same period! Treasury Zeros continued to out-perform the S&P 500 Index for the following two years.

 

$10,000 invested in US Treasury Zeros in 1982 grew to $1,003,865 by 2002 versus a $82,064 growth for the S&P 500 Index over the same period.

 

During that time, common stocks had been at their most expensive levels in history up 98,900 percent since 1929 and therefore much more susceptible to a decline or below par performance. Unlike stocks, fixed income securities are under valued in relation to their historical levels and represent a good value.

 

Comparing Yields

 

One of the best ways to compare relative value between stocks and fixed income securities is to compare the earnings yield of stocks with the yield to maturity for fixed income securities. Earnings yield is calculated by dividing a company’s earnings by its share price (inverse of calculating a P/E ratio). For example, let’s say Cisco Systems share price declined from a high of 82 in 2009 to a price of 32 in January 2010. Cisco earned 41 cents per share over a 12 month period, which translates to an earnings yield of 1% (.41 divided by 38.00). This compares to a yield of 5.5% for ultra safe short-term US Treasuries. Even though Cisco had experienced a 50% price decline it is still over valued when compared to the yield of US Treasuries.

 

 

Beating the Bogy with Bonds

The following is an excerpt from Lee Gettess' Lee Gettess on Day Trading

There is an aspect of technical analysis that is often overlooked, which I believe might be one of the most important clues to probable market direction almost all technical analysis begins an a bar chart. Each bar represents some unit of time, although many software packages now allow the use of tick bars, which are units of activity rather than time. Since those basically function under the same rules as time bar charts, we will discuss on the basis of time only.

Each bar on a chart could represent one day's worth of price action. It could also be an hour, a 10 minute period, a week, a month, a year, etc. The exact time frame we are dealing with is irrelevant. All of them hold to the same basic truth.

That basic truth is that each bar has to make both a high and a low. It doesn't matter how active or inactive, or whether the market is going up, down, or sideways. Each and every bar will make a high and a low.

Finally -
Now It's Your Turn

 

 

What an opportunity! You can make more money now than you ever thought possible – and you can do it without unnecessary risk. Fortunes are being made right now by those who are lucky enough to have the right knowledge at their fingertips.

 

Buying stock and mutual funds may work out in the long run . . . but you can have your stock market! The real money’s being made using other investment strategies. Investment strategies you can use to grab gains you never thought possible, with:

 

Since I first released my book, I’ve shared actual trades with readers – totaling a $4,787,508.08 Profit! And I’ve made over $3 million actual gross income this past year.

 

 

Invest the Fail Safe Way!

Our Author Team

Ken W. Chow