Dividend Investing Weekly: Investment Grade Bonds Are a Smart Alternative to Treasuries

You are receiving this email because you signed up to receive our free e-letter Dividend Investing Weekly, or you purchased a product or service from its publisher, Eagle Financial Publications. [Dividend Investing Weekly] [Cash Machine]( [Quick Income Trader]( [Breakout Profits Alert]( [Hi-Tech Trader]( Investment Grade Bonds Are a Smart Alternative to Treasuries by Bryan Perry Editor, [Cash Machine]( 08/12/2024 Sponsored Content [Get Paid Every Month with this "Forever" Dividend Stock]( After 31 years of trading the markets, I've just found the Holy Grail of dividend stocks, with a sky-high yield and monthly payouts, PLUS a dividend. See cash pile up in your account - cash you can take to enjoy life or re-invest to rapidly grow your income payouts. And the best thing is, I've put all the details in a new Special Report you can download FREE. [Click HERE while it's still available.]( The backdrop for being invested in floating rate assets for the past two years has been ideal. The fed funds rate was near zero in the first quarter of 2022. From that point, 11 rate hikes followed as the fight to stem “transitory” inflation got underway. Fueling the fires of inflation were the substantial stimulus programs in the United States. The federal government obligated approximately $4.5 trillion and expended around $4.2 trillion in COVID-19 relief funds allocated from the CARES Act, Consolidated Appropriations Act and the American Rescue Plan. Add the Inflation Reduction Act ($369 billion), the CHIPS and Science Act ($280 billion) and the Jobs Act ($550 billion), and we are now talking about $5.7 trillion in spent or yet-to-be-spent funds that throttled the federal deficit higher. The Fed got way behind the curve, which is nothing new, and held rates higher for longer. It has now probably waited too long to start the easing process given the weaker trends in labor and manufacturing, and a noticeable decline in travel demand for summer 2024. As the post-COVID-19 phenomenon of what is termed “revenge travel” wanes, consumers are taking a more cautious approach due to what is a rising sense of an economic slowdown in the making. It is what the Fed wanted; now, it is all about sticking the landing -- soft, hard or touch and go. [If Americans Are Not Worried About Running Out of Money, They Should Be!]( According to the Survey of Consumer Finances (SCF), nearly half of all U.S. households have no money at all saved for retirement. Among those already retired, the savings rate is better... but still only $171,000 in 2022. Yet there is simple but little-understood solution to this looming retirement crisis. If investors move [quickly enough](, they can LOCK IN a regular source of extra income with annual returns as high as 11.1%, guaranteed for life. That’s 761% greater than the average S&P 500 dividend. What’s more, these payments are NOT affected by anything going on in the stock market or in other financial markets. There’s only one downside: this rare opportunity to lock in DOUBLE-DIGIT-PERCENTAGE returns for life may not be available much longer. [Click here to find out more!]( The bond market has wasted no time making up its mind, but with competing forces at work. Recent data squarely spells out that disinflation is at work, most notably laid out in the Consumer Price Index (CPI), Producer Price Index (PPI) and Personal Consumption Expenditures (PCE) Index data for June. This week, investors will receive CPI and PPI for July, both of which are expected to come in at 0.2%. The headwind for bond yields going forward is not so much deflation, but demand for the ongoing record debt issuance of U.S. Treasuries to fund the soaring budget and budget deficit. To put this into perspective, over the past year, the national debt increased $2.41 trillion, which translates to $6.65 billion per day. As of July 31, 2024, the total national debt has surpassed $35 trillion. Put another way, over the last decade, national debt balance rose 86%, while gross domestic product (GDP) grew 63%. Conquering goods and services inflation is one thing, but creating a potential scenario of economic fallout from the risks of failed bond auctions is unacceptable. This should be an alarming milestone to not just taxpayers, but to policymakers, and yet neither candidate running for the White House speaks of the intense fiscal discipline required to avert what the Congressional Budget Office warns of: investors in Treasuries losing confidence in the government’s ability to manage its budget, leading to a sharp rise in interest rates. And while the risk of such an event is currently low, the threat of such a scenario accelerates if the spending binge is not reversed. [#1 A.I. Software to Find What to Trade]( With thousands of assets to choose from, filtering through these to find the most promising ones can be daunting. What if I told you there is a search engine like the one you love and trust, but designed for traders like you to search and dominate the markets by accessing the most timely and accurate information? If you’ve never traded with predictive analysis or leading indicators... If you feel like you don’t have the time (or knowledge) to properly conduct thorough research and analysis... [Come learn (for FREE) the #1 A.I. to find what to trade.]( For investors that want to have a plan for U.S.-based fixed income, then consider investment grade corporate bond exchange-traded funds (ETFs) and build a laddered portfolio as an alternative to Treasuries. Investing in Fortune 500 balance sheets is arguably a strong consideration given a hyper-indebted government that is showing no signs of fiscal resolve. There are bond ladder ETFs offered by several investment firms, where strong debt ratings, broad diversification, attractive yields and monthly payments make for an attractive investment proposition. The Invesco BulletShares is one example of laddering out maturities over 10 years and locking in a rate of return at around 5%. No one can really know if and when the Treasury market will indeed have issues with demand not meeting future supply expectations. For now, a blend of Treasuries and investment grade corporate bonds might make sense to those seeking the safe haven assets managed by America’s strongest companies with fortress balance sheets. With the Fed on track to lower interest rates, it is no surprise that blue-chip debt is under accumulation and will very likely continue to be throughout 2024. Sincerely, [bryan-perry-sig] Bryan Perry Editor, Cash Machine Editor, Premium Income PRO Editor, Quick Income Trader Editor, Breakout Options Alert Editor, Hi-Tech Trader Editor, Micro-Cap Stock Trader About Bryan Perry: [Bryan Perry]Bryan Perry specializes in high dividend paying investments. This weekly e-letter combines his decades-long experience in income investing with a simple, easy-to-read format that investors of all stripes can work into their portfolios. Bryan also serves as Editor of these services: [Cash Machine]( [Premium Income PRO]( [Quick Income Trader]( [Breakout Profits Alert]( [Hi-Tech Trader]( and [Micro-Cap Stock Trader](. About Us: Eagle Financial Publications is located in Rosslyn, VA. – Blocks from the Capitol. Our products have been helping investors build their wealth for several decades. 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