Thanks for the question. I do not know if you know or not, but interest rates are extremely low currently.
Look at a 30 Year Treasury , it is yielding 228 basis points.(2.28%) and that is backed by the United States Government while the SPX or Standard and Poor's 500 Index ( stocks) is returning around 8% currently and no guarantee that it will stay that way by year end.
If I could guarantee 3-5% for life, I would be very well off.
- I say that because interest rates around the world are so low currently.
Warning : All investment involves risk, but here is what I suggest you do.
Search for corporations that have the highest credit rating and offer the most yield.
- This is equivalent to taking the least amount of risk with most reward.
- The higher the credit rating, the least likely they are too theoretically default.
- Google to see what the credit ratings mean. (You have to do some homework, otherwise I could do it for you but,would have to charge you a fee. ;) )
Google will bring you here
According to MarketWatch
- "In a sign of deteriorating credit quality,
Standard & Poor’s on Tuesday stripped oil giant Exxon Mobil Corp. of
its pristine AAA rating, leaving just two U.S. non-financial companies
with what is the highest possible rating on their debt."
I then searched for those two companies. I got one of them, Microsoft.
Go to this website ( FINRA Bond Center - Market Data - Morningstar is a place to find corporate bond data) Finra: Click on Search Tab
Click the "Corporate bubble for type of debt instrument"
Then in issuer name, type in "Microsoft"
Sort by Yield. That is what we want. I found this one
MICROSOFT CORP MSFT4307011 Yes Corporate Bond
4.750 11/03/2055 Aaa AAA AA+
The yield is deceiving and does not set what it actually trades for. The correct yield is in bold:
7/22/2016 09:44:36 7/27/2016 T 3000000
That means that if you bought that specific one, it will pay you a coupon of half that yield in bold semi-annually.(every 6 months)
I am going off the assumption you understand 100% on bonds work and understand the risks associated with them including, duration, convexity, and other risks including liquidity risk meaning when you are trying to sell or buy a bond because fixed income is less liquid on average than equities ( for now).
Hope this helps!
**Shortened version, buy US Investment Grade Corporate Bonds**