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A weekly review of trends, facts and tips for journalists
- Many long-term investors are looking for higher yields without taking on substantially more risk. Christopher Burdick explains the benefits of investment-grade corporate bonds in today’s market.
- As college costs continue to skyrocket, Rande Spiegelman explores various tax-advantaged college savings accounts to help families save more.
CONSIDER CORPORATE BONDS NOW
Christopher Burdick, director, economic analysis, Schwab Center for Financial Research 
Are you a long-term investor looking to beat the puny yields on U.S. Treasuries and money market funds without taking on substantially more risk? We think now may be a good time to consider investment-grade corporate bonds — the prices of many have fallen in the midst of credit market uncertainty, lifting yields to abnormally high levels.
Our view assumes a W-shaped economic recovery, with two downtrends before the economy gains a more durable sense of traction. We believe the stimulus checks and strong exports provided a temporary lift — symbolized by the middle upward part of the "W.” But since those checks weren't generated from a tax cut, they won't produce a sustainable lift to consumer spending, in our opinion.
Therefore, we feel that the brief economic respite is nearly over, and we're likely facing another period of weakness, at least equivalent to the first leg down. We think more time is needed for the economy to absorb the lingering headwinds associated with housing, energy and the credit crunch before benefiting from the tailwinds created by the Federal Reserve's rate cuts and liquidity-enhancing facilities.
Media Contact:
Lara Edge
415-636-3386 or 415-636-5454
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SAVE SMART FOR COLLEGE
Rande Spiegelman, vice president, financial planning, Schwab Center for Financial Research 
Whether you hope to send your youngster to an Ivy League college or a public university, brace yourself for a serious case of sticker shock. And with the cost of college rising an average 5 percent to 8 percent a year(1), don’t expect relief anytime soon.
But before you get too glum, here’s the good news: With today’s tax-advantaged college savings accounts and tax credits, there’s never been a better time to invest for a child’s college education. And remember that saving for college is like saving for retirement — by starting early, investing regularly and contributing as much as you can, you give yourself the best chance to succeed.
Media Contact:
Lara Edge
415-636-3386 or 415-636-5454
1. http://www.finaid.org
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IMPORTANT DISCLOSURES
This information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice or an offer or solicitation to purchase or sell any particular security. It is not intended to be a substitute for specific individualized tax, legal or investment planning advice. The strategies mentioned may not be suitable for everyone. Each investor needs to review investments and strategies in light of his or her own particular situation. Where specific advice is necessary or appropriate, Schwab recommends consultation with a qualified tax advisor, CPA and/or attorney. Data contained here is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.
All expressions of opinion are subject to change without notice. All research has been compiled from publicly available, proprietary and/or licensed data. Past results are not indicative of future performance.
When a bond is purchased or sold, Schwab charges a fee in the form of a commission or a markup or markdown. Individual bonds are subject to the credit risk of the issuer. Changes in interest rates can affect a bond's market value prior to call or maturity. There is no guarantee that a bond's yield to call or maturity will provide a positive return over the rate of inflation. Bond funds are subject to the same credit, interest rate, and inflation risks. In addition, bond funds incur ongoing fees and expenses. A bond fund's Net Asset Value will fluctuate with the price of the underlying bonds and the portfolio turnover activity; return of principal is not guaranteed.
Charles Schwab & Co., Inc. (Member SIPC) is a subsidiary of The Charles Schwab Corporation. The Schwab Center for Financial Research is a part of Charles Schwab & Co., Inc.
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