The Little Book of the Shrinking Dollar: What You Can Do to Protect Your Money Now

And It’s Not Just the Government . . .

Downgrading is in a bull market. As this bull market proceeds, investors will return to a healthy admiration for the value of a cash-rich balance sheet . . . and will scorn the value of a government guarantee.

The near-extinction of the American AAA credit illustrates the point well. As you’ll see, the government isn’t the only one who is going the way of the dodo.

In the early 1970s, about 60 U.S. companies possessed a AAA rating. A decade later, that number had tumbled to 30. By the early 1990s, the ranks of AAA credits had dwindled to nearly 20. When the new millennium dawned, only nine AAA companies remained. Seven companies managed to retain this prestigious ranking until 2009, when Berkshire Hathaway, Pfizer, and GE slipped into the AA ranks.

Today, only four U.S. companies boast a AAA rating: Automatic Data Processing (ADP), Exxon Mobil (XOM), Johnson & Johnson (JNJ), and Microsoft (MSFT). And right now, they offer a yield equal or better to the 30-year Treasury bond.

The downgrade cycle is still gathering momentum. But the cycle is shifting from the corporate bond market to the government bond market—aka, the sovereign bond market.

Solution!

Dividend-Paying AAA Peers Are a Good Way to Generate Income, without Investing in Bonds

If you don’t need to collect the income right away, you can bank it with shares of the Vanguard Dividend Growth Fund (VDIGX). Its top 10 holdings include all four of these AAA dividend payers: ADP, XOM, JNJ, ...