Despite what they say, Warren Buffett is not smarter than everyone else on Wall Street. He may well be the most successful investor in history—and the richest—but his extreme wealth is due partly to his use of an investing method that many small investors avoid.
For starters, this overlooked method is as safe as Fort Knox.
Now, you may think safe equals slow and boring. Not so... this asset class has consistently beaten the S&P.
For example, one of my current favorites has generated an annual average return just shy of 9% for the past 10 years. That’s close to triple the measly S&P 500 at 3.7%.
Better yet, a selected group of five of these special investments has generated an average return so far in 2008 of 14.5%!
Another reason the wealthy love this asset is because it’s the best hedge against inflation, and also possibly the very best protection against a Wall Street meltdown.
Get this; it’s also one of the easier investments to make because you never have to pick a market top or bottom. Maybe you’ve experienced the frustration of watching a stock head higher, only to reverse the trend sharply the day after you put thousands into it. What I’m about to show you eliminates this gut-wrenching problem.
And best of all... it doesn’t take a whole lot of cash to get into this moneymaker. Eight hundred dollars would cover our entire portfolio, giving you the added advantage of being able to diversify your risk... not that there’s much risk to begin with.
So why aren’t all investors buying this moneymaker?
I’ll give you all the details of this asset in a minute, but first I want to highlight the problem with today’s market.
Folks love Wall Street and the Dow, NASDAQ, and S&P 500. It’s a mystery why they do because the statistics don’t support their enthusiasm:
- The Dow Jones Industrial average is down 17.27% this year and only shows a tiny 4.89% total growth over the past ten years! The question is: can your portfolio survive on half a percent growth per year? Also consider that you need to make allowance for inflation and taxes on this meager half percent growth, and suddenly you’re looking at big losses. No wonder many folks can’t get ahead and are worried about outliving their money.
- Look at the NASDAQ, and you’ll see it still hasn’t fully recovered from the tech meltdown of 2000. Eight years and counting, and folks have yet to make back what they lost!
- The S&P 500 is down 24% in the past 12 months. That means it would have to come back 25% just to get back into the black. So when did the S&P last give anyone 25 percent growth? Realistically, how long will it be before you get back to break-even if you’re invested in the S&P?
Okay, so maybe Wall Street is not the way to go. Maybe foreign markets can make you rich?
Right now the German DAX Index is on a one-year negative slide of 15.5%. France’s CAC 40 Index is faring even worse, down 20.3% over the same period. China’s Shanghai Composite Index is down a whopping 59.9%, and Japan’s NIKKEI is down 21.3%. Declines in Russia’s RTS have earned it the dubious title of the worst performing major stock market according to a recent survey by Bloomberg News. In fact, since the war broke out in Georgia, it has lost an additional $290 billion in paper value for Russian companies.
Ahhh... but what about commodities? No luck there, either. Take a quick look:
The CRB index, which measures 22 basic commodities, has declined 20% in just the past two months with crude oil down 25% and gold down 35%, feeding this negative spiral.
As you can see, there are no winners in the entire spectrum today, yet investors continue to chase after them. That’s because brokers can make the most money for themselves by continually trading away your wealth. So of course they encourage you with promises of a jackpot around the next corner.
And maybe some folks have hit a home run now and again, but why bet on a “maybe”?
The investment we’re talking about has beaten all the above for a hundred years—and gives you bulletproof safety. So let’s take a look at:
The Favorite Investment of the Wealthy
The Best Opportunities Right Now are in Bonds Rather than Stocks
(he made this comment earlier this year on CNBC's Squawk Box)
As you’ve probably already guessed, the super investment we’re talking about is BONDS!
There’s a darned good reason why Buffett thinks bonds are a great investment.
For the past 24 months, investment-grade corporate bonds are up 8.3%, and US Treasuries are up 16.6%.
And of course these numbers look even better when compared to the LOSS of 5% posted by the S&P over the same period.
Want more good numbers? A group of six of my mini-bonds have produced a year to date return of 9.8% and best of all... they can be bought at current prices up to $25—that’s why I call them “mini-bonds.”
So if bonds are this good in a bad market, why do investors have so many reservations about them? Maybe their objections are based on ignorance?
Here are some of the objections I hear over and over:
NOT TRUE: Even if you’re in the 25% federal tax bracket, bonds will save you money. And most of my bond picks can fit anyone’s budget because they can be bought for $25 or less.
NOT TRUE: Over a 20-year period, for instance, municipal bonds have returned an average 7.5% per year, making them the second-best performing class on an after-tax basis.
NOT TRUE: You can trade them just the same as you buy and sell stocks on Wall Street.
NOT TRUE: In fact, historical default rates on municipal bonds are less than 1%.
NOT TRUE: Any aggressive investor would be happy with the exciting yields we’re seeing right now, like the 16% from a well known Blue Chip manufacturer and returns of 19% in 12 months from a premier bond fund. Also the numbers for the last 10 years on this fund look even better. It has returned more than 175% over this time frame. (Try beating that with the Dow, NASDAQ or S&P 500!)
NOT TRUE: This is the most widespread myth about bonds. Falling rates do make it easier to make money, but when interest rates are rising, bonds are still giving you double what the general market will give. (Just look at the 10-year average on the fund I gave you.) The truth is: Only an individual country, corporation, or a fund’s fundamentals determine the direction of these investments.
NOT TRUE: If you were to invest just $5,000 in both our taxable and non-taxable portfolios, this could buy multiples of each bond and diversify your portfolio to give you an even greater opportunity for success.
You don’t need your broker! But if you really want to work through him, we’ll show you how easy it is.
As you can see, bonds are every bit as profitable, or better, than any stock, commodity or any other sector. PLUS they give you rock-solid safety... a real benefit in today’s uncertain marketplace.
Over the years, stocks have been sold as the steak, and bonds the broccoli... and while the broccoli doesn’t sizzle like steak, it’s necessary for your financial health. In other words, bonds will help you grow your wealth, whereas stocks will only give you a temporary and fickle high.
The elite of the investing world... Warren Buffett, Bill Gross, Dan Fuss and many others, are heavily invested in bonds. These men don’t like to gamble with their money—they want a sure thing...
Take Warren Buffett for example. In February of this year he offered to insure $800 billion in municipal bonds. That’s almost a trillion dollars! Now ask yourself if someone like Buffettwould risk such an astronomical amount if he did not believe in the fundamental value of bonds.
They don’t call me the “Bond King” for nothing. I made billions for my customers while working in the bond and banking communities on six different continents with Merrill Lynch International Bank, as well as serving as Chief Economist at Mark Twain Bank, Mercantile Bank, and British-based Guinness Flight.
For the past ten years I’ve been helping investors like you reach their financial goals by sharing all the secrets I learned over those many years. These insights have made me a regular guest analyst on CNN, CNBC, Bloomberg and many sold-out investor conferences. I’m also frequently quoted in The New York Times, The International Herald Tribune, The Wall Street Journal, Money, Business Week and Barron’s.
My reputation has been built on buying bonds from the right countries, corporations, and funds, and not just on buying them at precisely the right moment in the interest rate cycle. I’ve proven thousands of times over my career that you can consistently make double-digit gains in bonds in any type of market condition––you just have to spend 30-40 hours per week studying and researching the markets.
Of course that would be awfully tedious for you. But that’s why I’m offering you my services today. Let me do the research so you can spend your days on golf or playing with the grandchildren, not on trying to decode quarterly report gobbledegook.
Just think about this: Those wealthy individuals I mentioned are not sitting around clutching their stomachs every time the stock markets take another dive. No, they’re heavily invested in the safest asset class where they know their returns are almost guaranteed.
Do what the wealthy do…sign up for The Yield Letter and I’ll show you how they build their wealth.
The key fact is that bonds are like an I.O.U.—you’re guaranteed to get your money back. It’s carved in stone, and while bonds don’t have a popular reputation for beating stocks, this reputation does not reflect the reality.
Here’s proof: Take a bond in our portfolio that’s producing an annual yield just shy of 9%. Even without any gains and or reinvestment, you’re looking at a 45% return in five years. This beats the general stock market by 35% for the same period.
And here’s something else to consider. These best-of-the-best investors invest hundreds of millions of dollars, and they don’t like sleeping with one eye open. Bonds give them peace of mind. They’ll give you peace of mind, too.
Not only that, but many bonds also give you tax-free growth. For example, income from municipal bonds is free from federal taxes (and in some cases state and local taxes). Ten percent profit in these bonds means YOU get to keep it all. Ten percent profit on the stock exchange means you get to share half your hard-earned gains with your unintended partner at the IRS.
Just think about what I’ve outlined here for you...
- Traditional stock and commodity investing may work for a handful of insiders now and then, but you can rely on bonds to work for you consistently.
- If the elite of the investing world believe in bonds, and you learn to share their tastes, won’t you get richer too?
- Bonds give you competitive gains, tax-free benefits, and safety... all the ingredients necessary to build solid wealth year in and year out.
Today I’m offering you the opportunity to discover how bonds can build your wealth while protecting you from the Wall Street roller coaster. Thousands of our readers are multiplying their income while they sleep peacefully at night. Just follow this link and join them.
I’m inviting you to take a 100% risk-free look at The Yield Letter—your complete authority on bonds. And just for signing up today, we’ll send you the following free reports to get you up and running quicker in the moneymaking world of bonds.
Now, you’ve probably seen other investment newsletters and bond advisories that cost $699 to $999 for a one-year subscription, but a one-year subscription to The Yield Letter is only $499. And as I promised you, I’m going to give you a free copy of the special report—HOW TO GET TAX-FREE MONEY. The money you save on your taxes could easily pay for your one-year subscription.
What you’ll find in this report are my top five municipal bond funds you can put your money in today... and most are selling at a nice discount to NAV right now.
But there’s more: You’ll also receive HOW TO USE A BANKERS SECRET TO MAKE MONEY IN BONDS. My experience as a bank bond trader allowed me to retire with millions at the age of 34—now I share these secrets with you.
That’s right... I reveal all the secrets of my bond trading strategy. After reading this special report you’ll have the tools necessary to execute the types of trades we’ll be making. You’ll understand how bond markets function, what factors affect the prices, and what trends to look out for. In short: you’ll be able to identify what makes a good bond investment.
It gets even better... sign up for a two-year subscription for $849 and receive 24 issues of The Yield Letter. You’ll save $149 over the one-year subscription PLUS you’ll receive two additional FREE Reports:
HOW TO PROFIT FROM THE ENERGY BOOM
WITH BONDS
Energy stocks are hot right now but energy bonds are even hotter. In this free report, get the names of the best energy bonds to invest in.
Don’t worry you won’t be reading about volatile stuff like oil and gas. But you will find the names of two electricity-producing utilities. One has the country’s largest gas transmission and storage system. This makes it more of a diversified energy player than a slow-growing utility stereotype.
HOW TO USE HYBRID BOND INVESTMENTS FOR
LOW-RISK YIELDS. This little-known strategy will produce regular monthly checks for you. Get your next check in 30 days!
I call this a hybrid because it’s a combination of a common share and a bond. And the beauty of this investment is that you can rake in profits from the standard dividend that normally comes with a stock PLUS the interest you earn from holding the bond.
And there’s even more good news about this strategy. It gives you exposure to some great companies that are a bit off the beaten path. You’ll read about four companies that’ll give you yields of 11-14%!
Here’s another option available for you: take advantage of our new Quarterly Subscription for just $135 per quarter. You’ll still receive the free report HOW TO GET TAX-FREE MONEY and HOW TO USE A BANKERS SECRET TO MAKE MONEY IN BONDS that I promised with the one-year subscription.
In addition, whatever special renewal bonuses I give my subscribers after one year will also automatically be passed onto you... just another free gift to look forward to!
And remember... these special reports are exclusively available only to my charter member subscribers. You can’t get these with any other promotion or anywhere else. But I’m giving them away as a FREE gift to thank you for your quick response membership today.
As you can see from the brief introductions, these reports are packed with information that’ll give you a handy leg up and put you on a fast track to double digit annual returns.
And no matter whether you sign up for one year, two years, or take the easy route with a quarterly subscription, you’ll be covered by our
Join the wealthy who never have to fret about the stock markets. Kick back and enjoy life. Click on the link below and join the elite who are building their fortunes the right way, with bonds.
But whatever you do, act now!
Sincerely,
Neil George
Editor, The Yield Letter
P.S. Just to make sure that you’re completely ready to enter into the world of bonds, I’ll supply you with a list of my favorite brokers, who will be able to execute all of your bond trades, if you don’t already have a bond trader you really like.
P.P.S. We won't be gambling on the resurgence of internet stocks, betting on over-hyped commodities or attempting to buy the latest biotech high-flyer that’s being talked into the stratosphere by self-serving pundits.
Frankly, many of my Yield Letter readers are not interested in following the bond markets that closely. They’re delighted just to collect regular dividend checks from their mailboxes while they relax and enjoy watching their wealth grow.
Join us today and look forward to enjoying the same lifestyle. And remember, if bonds can help build Buffett’s wealth, I’m sure they can help build yours!