These five expert tips will help you build a fixed-income portfolio with maximum benefits, ensuring you’re setting yourself and your money up for success.
The challenge is that no single bond or fixed income asset can play all of these roles well. For this reason, your mix of assets is key.
“What’s important here is understanding what your portfolio needs and what types of fixed income best support those needs,” said Pulsifer. “This is your first step.”Recognize that your priorities will likely shift with the market. When interest rates were higher, the primary objective of fixed-income portfolios was generating income and protecting it from inflation. Today, investors look for assets that offer more flexibility.
Younger investors can afford to keep a higher portion of their portfolio in stocks, while also investing in high-quality fixed income assets to stabilize their portfolio, Pulsifer added. On the other hand, older investors may want a higher percentage of assets in fixed income, and should choose fixed-income assets that can generate measurable income, such as an amortizing payment stream that returns principal and interest.
“Keeping a variety of different fixed-income assets with varying maturity dates allows you to get higher rates of return than if you were simply keeping your money in a savings account,” Pulsifer said. “But it also keeps your money flexible so you can take advantage of the rising interest rates we’re almost certain to see in the next few years.”
Instead of locking all of your money with one investment at today’s rate, with a laddered portfolio you can set things up so that you are able to regularly reinvest a portion of your money at a higher rate.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Queen store opens in London marking five decades of the bandFrom T-shirts to guitars signed by Brian May, Queen memorabilia is up for sale in a new pop-up store in London's Carnaby Street celebrating five decades of the rock band's music.
Read more »
This Mom Is Sharing The Story Of How She Nearly Died During Childbirth — Here's What An Expert Says“No one saw it coming...except me.”
Read more »
Democrats’ Tax Plans Worry High-Income Business OwnersMost closely held businesses won’t face higher taxes, but bigger, more profitable companies could see their costs swell.
Read more »
How to Care for Your Mental Health When Psoriatic Arthritis Pain Becomes Too MuchReal people share the tips that keep them going.
Read more »
Everything You Need to Go Mushroom Foraging Without Dying or Coming Home Hungry“Wildman” Steve Brill shares the essential tools—and tips—for nature’s best treasure hunt.
Read more »