Howard, I would be more likely to opt for the AAA CEF preferreds, as they are nearly as safe as Treasuries and yield much more. The only bad thing is that many could redeem in 4-6 years and there is no room for price appreciation. But if you are looking for safe, high yield, that is the place. RGL- and GAB- are my current favorites.
If you are set on bonds, don't buy the current run. Off the runs, those a few years shorter than the current bond, yield much more for an individual. For example, THE long bond, the 5 1/4s of Feb 2029, are yielding 5.91% to maturity. The 8%s or 2021 are yielding 6.14% to maturity. Nearly .25% for going off the run. Yes, if you are a pro trader, there are games you can play with the current bond that make up for and are actually the reason for this disparity. But that doesn't sound like the situation you describe.
Even better, if you can go zeroes, you can zip all the way down to May of 2017 for a 6.33% yield to maturity. But, if you need current income, zeroes give you just that, zero. <g> |
