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I'm retired and depend on bond income to supplement
social security. You might want move some of your investment into corporate bonds to increase your yield.
There is potentially more risk, but not if you research the company. Most of my investment is currently in
Wickes Inc; I was in the building products business
and have studied most of the companies very carefully.
Wickes (WIKS)is a 'turnaround' situation and instead
of trying to compete with Home Depot and Lowes has
found a lucrative niche selling almost exclusively to
building contractors. Sales last year topped $1 billion
and PE ratio has dropped below 6 with a comfortable backlog in hand. They have one bond maturing in 2003.
It pays 12 5/8% and because it is trading at 85, yield
is presently 13.6% per annum; thus there is a 16.7%
yield to maturity because of the capital gain component
Unfortunately, bonds like these are as rare as hen's
teeth and don't know what I will switch to when they
mature. Maybe higher interest rates will stimulate the
corporate bond market again. - - matthew
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