Richard Lehmann

Income Investing Today (eBook, PDF)

Safety and High Income Through Diversification

• Format: PDF

Produktbeschreibung

Income Investing Today Income Investing Today details a safe alternative to the downside risks inherent in the stock market--income securities that can provide a 7% to 8% annual cash income. With this book, fixed income expert Richard Lehmann outlines income investing concepts you need to understand, various investment vehicles, and investment strategies that will help you build a safe, diversified portfolio of investments. The investment vehicles he explains range well beyond traditional fixed income securities or creditor instruments such as bonds, to include hybrids, REITs, mutual funds, and more. He shows that the key to building a steady, growth-oriented income portfolio is to diversify over a variety of securities that depend on different drivers--that is, portfolios that are not vulnerable to any one specific economic factor such as interest rates. The ideal guide for individual investors saving for retirement and seeking more safety in their portfolios, Income Investing Today shows how a diversified collection of income securities can equal or exceed the returns from common stock with much lower risk.

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Produktdetails

• Verlag: For Dummies
• Seitenzahl: 256
• Erscheinungstermin: 11. Juni 2008
• Englisch
• ISBN-13: 9780470140079
• Artikelnr.: 38200702

Autorenporträt

RICHARD LEHMANN is President of Income Securities Advisors, Inc. (ISA), and publishes the Forbes/Lehmann Income Securities Investor newsletter, as well as the ETF Investor Newsletter and Distressed Debt Securities Newsletter. He founded the Bond Investors Association (BIA) in 1983 as an information and advocacy organization for individual bondholders. ISA is the successor to BIA. Lehmann is also a columnist with Forbes magazine and has been actively involved in fixed income advising and bond defaults since 1976. He is also the portfolio manager of the Fallen Angels Income Fund (FAINX), a publicly traded no-load fund. Lehmann has taught finance and accounting in Miami and has spoken at numerous investment seminars. He holds an MBA from Columbia University, is a CPA, and an SEC-registered investment advisor. Visit www.incomesecurities.com for more information.

Inhaltsangabe

Foreword xiii
Preface xv
Introduction xvii
1 The Why and How of Fixed Income 1
Why Consider Fixed Income 1
Growth versus Income (Stocks versus Bonds) 1
What Kind of Investor Are You? 4
Investment Strategies 5
Asset Allocation 5
The Right Allocation for You 6
Diversification 7
Retirement Planning 11
What's Exciting about 6 Percent Returns? 14
What You Need to Know about Risk and Uncertainty 17
Subjective Risks 18
Objective Risks 19
Uncertainty 20
Understanding Interest Rates: General Features 21
Compound Interest 31
When Interest Rates Rise 32
Comparative Yields Explained 34
What to Pay: Fair Value Pricing 38
When to Sell 40
Using Leverage and Margin 43
Credit Ratings 43
Below-Investment-Grade Ratings 46
How to Read the Ratings 49
Credit Ratings Drift: An Ongoing Problem 51
The Federal Reserve Bank 52
Security Dealers and Brokers 56
2 Information Sources and How to Use Them 59
Investment Advice via the Media 59
Prospectuses 60
Misuse of the English Language 64
Getting Railroaded by China 66
When to Worry about the Accounting 69
Financial Statements 71
Balance Sheet 73
Income Statement 75
Statement of Cash Flows 76
Shareholders' Equity Statement 77
Defining Earnings 78
More Important than the Numbers 79
Summary 80
3 Bonds 81
Basic Features 81
U.S. Treasuries 83
Corporate Bonds 88
Equipment Trust Certificates 90
Direct Access Notes 90
Junk Bonds 92
Step-up and Pay-in-Kind Bonds 93
Zero-Coupon Bonds 94
Put Bonds 95
Insured Municipal Bonds 96
Lower Rated Muni Bonds 99
Conduit Bonds 100
Taxable Munis 100
Unrated Munis 101
Buying Municipal Bonds 103
Municipal Bond Defaults 104
Miscellaneous Topics 105
The Bond Indenture and Trustee 105
Call Provisions 106
Put Provisions 109
Money Market Accounts and Funds 110
Certificates of Deposit 111
Duration 111
Questions to Ask When Buying a Corporate Bond 113
Questions to Ask When Buying a Muni 114
4 Preferreds and Hybrids 117
General Features 117
Hybrids: Bonds/Indirect Bonds 118
Preferred Equity Traded (PET) Bonds 118
Trust Preferreds 119
Third-Party Trust Preferreds 120
Foreign Preferreds 121
Partnerships 121
Perpetual Preferred Stock 122
Buying Preferreds 122
5 Convertibles and Adjustable-Rate Debt 127
Convertible Bonds 127
Convertible Preferreds 129
Adjustable-Rate Debt 132
6 Income Stocks 135
Overview 135
Canadian Energy and Royalty Trusts 136
Other Canadian Trusts 138
Real Estate Investment Trusts (REITS) 139
Other Common Stocks 140
7 Mutual Funds 143
Overview 143
Bond Funds 145
Junk Bond Funds 147
Municipal Bond Funds 148
International Bond Funds 149
Exchange-Traded Funds (ETFs) 149
Closed-End Funds (CEFs) 152
Closed-End Bond Funds 153
Closed-End Preferred Funds 154
Buy-Write Funds 155
8 Securities and Other Investments to Avoid 157
Unit Investment Trusts (UITs) 157
Derivatives 158
SEQUINS and ELKS 160
PARRS 161
Hedge Funds 162
Commercial Paper, Bankers Acceptances, and Repos 164
Collateralized Debt 164
9 Other Topics of Interest 167
Bankruptcy 167
Endgame Strategies 173
Tax Strategies 174
Dividend Strategies 175
Taxation and Mandatory Convertible Preferreds 176
Tax Reporting 177
Original Issue Discount 180
10 Summing Up 183
A Long-Term Strategy for Income Investing 183
Appendix Internet Investment Information Sources 189
Glossary 199
Index 227