Challenging the Paradigms of Investing
4. In today's low yield environment, did you know that inflation causes investors of Treasuries to lose money? Treasuries are seen as a "safe haven" investment, but as of the middle of July, the 10-Year Treasury had fallen to less than 1.5%. Yet inflation burns off at a rate of 1.7%. This leaves investors with a loss of about 0.2%. I believe better opportunities exist.
As I've discussed recently, there are plenty of dividend-paying resources stocks with yields much higher than the 10-year Treasury, as well as municipal bond funds that have a higher 30-day SEC yield on a tax-equivalent basis than long-term Treasuries.
Always Be SurprisedAmong the millions of people around the world who will watch London's Olympics, many will stay glued to their flat screens to see firsthand the element of surprise. We want to see the rising star who was considered the underdog, the athlete who takes a record number of gold medals or the team that pulls off an unexpected win.
These are memorable moments in the making, like track and field star Jesse Owens, who changed history when he overcame adversity and infuriated the Nazis when he won four gold medals during the 1936 Games. Just like the Olympics, I encourage investors to always stay curious and watchful because you never know where the market's opportunities will be.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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