Making Money difficult with low interest rates

Well, as you know, you can make money from stocks, which fluctuate in price, and create capital appreciation, or in bonds or fixed money instruments. These instruments provide a fixed yield by either being available at a discount price which matures at par or are sold as  bonds or GICs, at say 5% which creates greater capital. 

 Another simple way to look at stocks and bonds is that with stocks you are an owner and with bonds a loaner.  With stocks you own a piece of the company, with its potential to make or lose money. With bonds, you have simply loaned the company money which is paid back with interest at a fixed date.

With markets taking a beating this week, it is hard to know where to turn. Money market instruments provide low yields and are taxed at a higher rate. Stock markets have greater potential for volitility either up or down, but the trend is down in many indices this week.  The stock market requires a lot more attention, especially if you are trading an active stock. Stock market taxation rates are lower.  With bonds you can sleep at night but potentially starve.  A half-million dollar portfolio at 5% will only yield $25,000, before taxes.

A lot of people are figuring out their options, especially in light of their retirement plans.  More tomorrow.

M.