This is the latest in a series of video interviews in which Pat McKeough will give his advice on a variety of topics. Some will deal with his overall investment philosophy, others on specific investment strategies and still others will be comments on events that are affecting the markets and the economy. Asked about when he would advise buying bonds again in light of interest rates, Pat replies with a piece of advice that applies to stocks and bonds. Don’t make your buy or sell decisions with just one statistic in mind. Consider all the circumstances. In other words, “If you’re going to play the game, look at all your cards.”

Below is the transcription of Pat’s comments.

Stocks and bonds: A Judgment on Bonds

Q: Pat, I know you’ve been advising people against investing in bonds. How much would rates have to go up before you’d change your mind and recommend buying bonds?

Pat McKeough: I have to tell you that’s not the kind of advice I’d give. Brokers are famous for giving price targets. The idea is that you’ve got this $25 stock and we’ve got a $29 target on it. That kind of means that when it gets to $29 to sell and go buy something else.

But the problem is: what else has changed? You shouldn’t just have a single statistic that you are going to react to when it’s reached, regardless of what other things have happened with the company. And that’s true of an individual stock, but it’s even more true of something like interest rates.

Interest rates change for a variety of reasons. If you don’t know what brought on the change—or the length of time it took—you’d be acting almost on a random basis, because you’re not really looking at what’s recently happened.

And any time we change our opinion on a stock, it’s not because it went up a certain number of dollars or a certain percentage, or some other event happened. It’s because we’re looking at it and we see this is no longer an attractive choice for investment. And I think that’s the way to look at it.

It’s like the old saying: “If you’re going to play the game, look at all your cards.”

Safe-money investments: “If you’re going to play the game, look at all your cards.”

Bonds may not be your best buy right now, says Pat McKeough, but there are safe-money investments that are just right for today’s market. And you don’t have to take big risks to make big gains with these investments. You’ll find the best of them in Pat’s newsletter for conservative investors, Canadian Wealth Advisor. He relies on three investments that can bring you profits year in and year out: Real estate investment trusts (REITs), exchange-traded funds (ETFs) and established stocks. As a new subscriber you can save $50.00 for a full year (12 issues) of this unique Canadian advisory. Click here to start your subscription now.