Investment grade fixed income has historically been seen as a safe haven for investors but the total return on the Bloomberg Investment Grade Corporate Index for 2021 was -1.0% and US junk bonds now yield less than 4% with a projected 9% default rate.
bonds
Concerns as income-seeking investors weigh risk
The yield on traditional fixed-income instruments such as bonds might no longer be attractive for the risk involved. Government bonds yield less than 2 per cent interest in most countries and are actually negative in most of Europe.
How inflation-proof is your portfolio?
Investors face a dilemma. Should they prepare for inflation from too much money in the system, or deflation from the bursting of multiple asset price bubbles?
Credit cycle weak spot for some fixed-income alternatives
Some investors are venturing into fixed-income alternatives, but many of these alternatives might be linked to the credit cycle or the economy – i.e. borrowers paying back their loan or buyers paying their invoices.
Income-seeking investors face painful reality
The yield on traditional fixed income instruments such as bonds might no longer be attractive for the risk one takes. Government Bonds yield less than 2 per cent interest in most countries and are actually negative in most of Europe.
Case study: start saving for a child’s education with as little as $2,500
David and Sarah are determined to see that one year-old Nicholas goes to a private school in his secondary years. They have $2,500 to start their Savings Plan from Sarah’s parents, and hope that with their own monthly savings they can finance his school fees, and possibly have some funds left over for a second […]
How does a family amass enough ‘after-tax’ assets to fund education?
A bond can be established using a savings plan with the intended purpose of building the investment to a certain level, from which point it can be drawn down to finance a child’s education costs.