Working On The Railroads

High priced energy has started to put a dent in corporate profits, but most of the nation's top railroads have moved right along with strong sales and earnings in 2008. Rising demand for transporting food and coal keeps things rolling along.

The four railroad companies in the Dow Jones Transportation Average have seen their stock prices increase an average of 34% this year. And the good times may continue because it costs less to transport goods by rail than by truck.

A railroad industry group claims that trains can move a ton of freight 431 miles on one gallon of diesel, which is about three times as far as a truck can.

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It's Like Money In The Bank!

Struggling banks, desperate for money, are ratcheting up CD rates, which many healthy banks feel compelled to match. You can find one-year CDs with yields over 4% and five-year CDs paying in the neighborhood of 5.12%.

Such plump yields put Treasuries with similar maturities to shame. One-year Treasuries were yielding just 2.19% while five-year issues averaged 3.21%. The advantage in yield is more than enough to compensate for the tax advantage that Treasuries have. Investors pay full tax on CD interest while interest from Treasuries is exempt from state and local income taxes.

The yield advantage at banks is because investors are willing to forgo yield for the safety of the Treasury. You can shop for the highest yielding bank CDs at www.bankrate.com.

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