Stay Away From Corporate Bonds! The Coca-Cola Company (KO)

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But Microsoft Corporation (NASDAQ:MSFT) is the ultimate shining star in the bond market. As one of very few companies that carry the ultimate AAA label from rating agencies, Microsoft is really the gorilla in the room. In Nov. 2012, it raised $2.25 billion of fresh debt from the market at rates ranging from 0.875% for 5-year notes, to 2.125% for 10-year notes. These rates are uncomprehensible.

The Foolish conclusion

When inflows to bond funds become that aggressive and when bond spreads shrink substantially, it’s time to pay attention and walk away. I believe the bond market will suffer in 2013. I recommend you put your money elsewhere.

The article Stay Away From Corporate Bonds! originally appeared on Fool.com and is written by Shmulik Karpf.

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