Corp bonds; Canadian Bank Equity; POT is HOT

Stocks rallied hard recently, then a big sell-off ensued. No surprise here. Lots of talk that markets bottomed in March. It’s very likely they have – but expect more horizontal movement. In the meantime, corporate bonds are still a favorite of the Inspector and investors world-wide.

There is still a lot of value to be found in equities, however, there is still a lot of volatility. A safe equity bet can be found with Canadian banks. As usual, average out your buy-in – don’t buy all at once. On the other hand, for a solid but guaranteed return, as mentioned in a previous post, Canadian bank corporate bonds have a nice coupon and are as safe as a Canadian government bond. In short, if you want value and stability, Canadian bank corporate bonds are the way to go. If you prefer to watch a slow tide, Canadian bank stocks may be right for you. Canadian bank stocks in general pay decent dividends, so you are being paid to wait as the tide turns.


For many investors that already have a large equity portfolio and nothing else, you should seriously consider going the fixed income route and pick up some Canadian bank corporate bonds to diversify and minimize risk. Remember, if a company “bites the dust”, bond holders typically get paid first while stock holders get nothing. Also, though corporate bonds trade daily, if you hold them until maturity, the payout is fixed.

On another note …

2009 is all about recouping losses. A familiar stock, Potash, is on the rebound. In general, the Agriculture space is looking good once again. The Inspector is not advocating “selling the farm” and going nuts here. Simply pointing out that an old favorite is starting to shows signs of life again. If you are holding agriculture stocks in your portfolio you are holding a piece of the future. Food is not getting any more plentiful nor is it getting any cheaper. The recent market downturns/recession likely stunted the momentum agriculture stocks were riding. But make no mistake, the ag sector is still a growth story and it is not going away.

DISCLOSURE: Author enjoys a nice burger once in a while, owns shares of Potash, and has no idea what the hell that picture of the large woman is doing in this post. Always do your homework before making an investment decision.