One of the lowest risk to invest your money is the 10 year US Treasury bond, in mid June the interest rate was over 3%. This level is the highest it has been since 2011. The importance of the number is bond rates are moving upwards.

In the risk reward strategies which all investment professionals use, if government bonds are risk free at 3% and higher, then why should you risk your money on something not to get more than 3%. The 3% becomes a benchmark and that is good.

Reporter Dale Jackson interviewed Zachary Curry President and Portfolio Manager of Davis Rea Ltd. and he said, for older clients who rely on steady income as rates go 3.5% or 4%, it begins to make sense to switch from dividends companies to US Treasuries.

Ideally, you can keep your dividend companies because you bought quality ones which tend to grow their dividend which makes the level you are looking for closer to 5% before a major switch. If you wish to move to more US Treasuries in your portfolio try to do a ladder approach or having different maturities which can rollover. A ladder can be 1 year, 2 years, 3 years, 4  years, 5 years.

Linking to dividend paying stocks, for your investments look at your total return – stock price appreciation and dividend payments before you move out of the stocks. While owning US Treasuries is good, as stock owners you also get to watch the company to see how they are doing if you own the shares or are considering owning the shares. If you get out, when would you buy back in?

There are more questions than answers, till the next time – to raising questions.