For those still in the productive years of their working life this may not be disconcerting. Conservative investors are turning away from the stock market in record numbers. For those nearing retirement the effect can be devastating. Nothing can compare with stocks over the long term, however many investors are not in that position.

Bonds and income investing offers security that stocks cannot match. No matter your investment strategy preservation of capital is rule number one. Barring a bankruptcy by the company in which the bonds were purchased the investor can be near certain of receiving the amount originally invested.

Bonds pay interest incrementally over time and provide income to retirees or people who want cash flow. The tax advantages of investing in bonds from governments and municipalities are the interest is tax exempt. This is attractive to those wishing to limit their tax liability.

No one can say for certain what will happen in the stock market. One this we do know it that all the major indexes are trending down with no end in sight. Investing in bonds becomes a more attractive option everyday.

Today’s investors are much wiser than in days past. Information is available for most any type of investor and investors make money in any type of market. Today’s investor also seeks portfolio diversification unlike investors of the past. Bonds and fixed income securities are an essential part of that equation Investing in bonds is very safe, and the returns are usually very good. Investing in bonds is generally considered safe.

Bonds are a foundational element of any financial plan to invest and grow wealth. Bonds will pay a steady income. Investment advisers typically recommend that investing is stocks and bonds, and cash can lead to portfolio diversification if each investment vehicle is tailored to meet individual investment objectives.

Bonds investing offers almost as many options as investing in stocks, . Bonds are essentially loans you make to corporations or governments. Bonds are also called fixed income securities because they pay interest that is fixed at a coupon rate. Bonds tend to be safer than stocks because if you hold bonds until the maturity date. Investors who agree to buying municipal bonds effectively loan money to the issuer in exchange for an agreed number of payments over a prearranged time period.

Investors need to consider their time frame to choose bonds that fit their needs. Investors in high-income brackets are almost always better off investing in tax-free municipal bonds. Investment takes plenty of effort, timing and crucial decisions, making it a rather difficulty, but ultimately rewarding endeavor .

Well ,so much for the trend being up. I am not sure how much more investors can take when it  comes to the scandals that keep hitting  the market. First we find out about Madoff, the biggest ponzi scheme in history, a 50 Billion dollar fraud . Then two smaller ponzi schemes were discovered this week, one for 17 million and one for approximately 50 million. To top it off Wednesday Satyam Computer Services chairman, Ramalinga Raju, announces that the company is a gigantic fraud. We are not talking some small unknown company.This is the 4th largest information technology services company in India, that employs 54,000 people! Satyam was founded 20 years ago. Amazing!!

The unemployment rate rose to 7.2%, the highest level in 16 years. More than 524,000 people lost their jobs in December, but that number was less that many analyst were expecting. In 2008 more than 2.5 million jobs were lost, with more lay-offs expected this year.

Earnings start in earnest this week and they are not expected to be pretty. Most companies are likely to write off as many losses as possible in their results. The only areas expected to post gains are the utilities, healthcare and consumer staples.

I’ll be watching for Alcoa’s earnings after close on Monday. They have already announced lay-offs(13,500 employees) and that they are reducing capacity(18%) and that they would stop “all non-critical capital investments”. Their shares are down 65% over the last 52 weeks. There is worry that they might cut their dividend, if they do I believe the shares will go down. If they say anything that can be construed as a positive and leave the dividend intact I think it will bounce.

Infosys Technologies Limited reports earnings on Tuesday this company could bounce if they hit their numbers. They could also benefit from the Satyam scandal picking up business in their enterprise solutions, financial services and manufacturing divisions.

There are a few other major earnings reports this week Xilinx reports Wednesday. Intel and Genentech report Thursday after the bell. It’s also thought that Roche of Switzerland is preparing an offer for Genentech, of which it owns a 56% stake. The offer is expected to be approximately $95 a share. Genentech closed Friday at $86.34. That’s not to say it’s a sure thing, last July independent directors rejected an offer of $89 a share.

Fed Chairman Bernanke will speak Tuesday at the London School of Economics.

Wednesday data will include retail sales numbers for December: import prices and business inventories

Jobless claims, inflation data will be released with producer prices Thursday the consumer price index, industrial production and consumer sentiment and personal finance on Friday.

Keep in mind that all of these reports have varying amounts of importance to the markets and can move them up or down.

As always keep your eyes on the markets and whether you are long or short may all of your trades be profitable!!

Becky