Beating risk free rate by 2%?

Discussion in 'Trading' started by nfactorial, May 4, 2010.

  1. Daal

    Daal

    I'm waiting for correction :cool:
     
    #11     May 5, 2010
  2. What's the investment horizon? A year, or more ?
     
    #12     May 5, 2010
  3. spindr0

    spindr0

    Buy utility preferreds. Average yield about 6%. Whenever one appreciates (say about 40 cts which is approximately the amount of a quarterly dividend), sell it and replace it with one with a higher yield/lower price. That way you'll bump the yield up a bit by taking periodic capital gains.

    Most are currently trading above issue price ($25) so you'll have to be cognizant of interest rate hikes.
     
    #13     May 5, 2010
  4. These days, what is risk free? Us gov't paper? Easy to argue that isn't risk free. Debt to gdp etc...

    But to give my 2 cents... I would say individual corporate bonds with names I feel safe in. But for ease perhaps csj. The ishares short term investment grade bond fund.
     
    #14     May 5, 2010
  5. It can be more than a year.

    For the listed suggestions, how does the additional risk scale with the additional profit?
    Is it a linear relationship?
     
    #15     May 5, 2010