Balance is as important in your portfolio as it is in riding a bike. For many investors, fixed income investments can help achieve the desired balance by helping reduce portfolio volatility and provide regular income.
Asset allocation is key
Fixed income investments, including bonds, are an important component in reducing investment risk in your portfolio as bond prices and stock prices often move in opposite directions and bonds provide income. How you allocate your portfolio among stocks, bonds and cash will depend on your individual circumstances and financial goals as well as how much risk you are willing totake.
As part of the financial planning process, you’ll want to work with your Financial Advisor to develop an asset allocation plan customized to your needs. As your circumstances change over time,your Financial Advisor can work with you to adjust your asset allocation plan. For example, as you get closer to retirement, it may be important to increase your fixed income allocation to helpreduce investment risk.
Broad selection available
Investors can choose from a wide variety of taxable and tax-exempt fixed income instruments, including bonds issued by corporations, states, municipalities, FDIC-insured banks, federally sponsored agencies and U.S. Treasury securities.
Investors might select bonds for their portfolios for a number of reasons:
Review allocations with your advisor
If your portfolio doesn’t include fixed income investments, talk with your Financial Advisor to determine what role these securities should play in your portfolio. If your investments do includefixed income securities, review your portfolio with your advisor on a regular basis to determine how current market conditions may affect your allocation mix and make the necessary adjustments.
* Diversification does not assure a profit or protect against loss.
Article provided by Robert W. Baird & Co. with the authorization of its author for Evan Guido, Vice President, Financial Advisor at the Sarasota office of Robert W. Baird & Co., member SIPC. The opinions expressed are subject to change, are not a complete analysis of every material fact and the information is not guaranteed to be accurate.
Evan R. Guido
Vice President of Private Wealth Management
One Sarasota Tower, Suite 806
Two North Tamiami Trail
Sarasota, FL 34236-4702
941-906-2829 Direct Line
888 366-6603 Toll Free
941 366-6193 Fax
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