The Finance Professor
- Article Tools
- Email this Article
- Print this Article
- Rss Feed
- Related Articles
- Why the Statement of Cash Flows Matters
- 20 Essentials for Achieving Financial Literacy
- Investment Research: Ignore the Ratings, Read the Reports
- Five Things You Must Know About the Fed
- Seven Ways to Handle Market Stress
- Booyah Breakdown: MBS 101
- Del.icio.us
- Digg
- StumbleUpon
5. A Fixed-Income Investment
Is Not Risk-Free
Maybe it's the legacy of the tech/net bubble or maybe it's investor ignorance or both, but it seems that if something has an interest rate attached to it, investors believe that it has little or no risk, and less risk than stocks . That could not be further from the truth. There were plenty of toxic "pieces of paper " which were packaged and sold to investors and bond mutual funds . Several issuers went into default . Spreads between investment grade corporate paper and government securities widened dramatically. All of those situations caused investors to realize losses or have to mark down fixed-income investments.
The lesson: Fixed-income investments have their own unique risk characteristics, which could cause losses and volatility greater than that of stocks.
To learn more about the recent mortgage meltdown and its repercussions, check out the following stories on TheStreet.com:
- Real Estate Funds Bounce Back
- Mortgage Giants Aim to Reduce 'Jumbo' Rates
- The Fed's Cut Won't Save Struggling Homeowners
- Credit Crises Nothing New -- 1907 Tells Us So
- Why Mortgages Blew Up
- Notes From the Credit Markets Front Lines
Savvy investors keep an eye on changes in a company's cash levels. Here's how it's done.
Here's the Finance Professor's checklist for market success.
Interested in professional stock opinions? Read this first.
The Finance Professor explains what the Fed does and how it can affect you.
Cope with volatility like a pro. Here's how.
Here's a look at how mortgages are sold, packaged as securities and resold to investors.
Yahoo! is among the most searched stocks on TheStreet.com. Here's what Cramer had to say about the stock recently.
Catch up on his thinking on the hottest topics of the past week.
Investors will have to deal with a Fed meeting and another flood of earnings and economic data.
Ensco International and Echelon have the potential to move higher in coming days.
See who made what calls.
The addition of video is helping telecom companies compete against cable and satellite companies.
The June West Texas Intermediate contract reflects selling pressure ahead of Tuesday's expiration. But stocks in the sector are generally trading higher.
See who made what calls.
Keep on top of the market and the critical information you need to make more profitable investing decisions.
Sponsored by:
RSS
