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CIP Quips

Time to Revisit

In the News:

An interesting article from CNBC earlier this month suggests that now may be the time to revisit bonds in your portfolio.  The article cites growing fears of a recession and factors like the Fed’s decision to take a patient approach to interest rates, slowing global economic expansion, increased U.S. stock market volatility and political uncertainty as reasons to seek what may be safer investments.  Douglas Kobak, CEO of Main Line Group Wealth Management believes that the “right portfolio can add more safety, since individual bonds have a stated maturity date when compared to mutual funds.” Kobak states that "Investment-grade and government bonds also have a low correlation to the stock markets, which can lower the volatility within a portfolio.”  He also points out that yields from a short-term bond portfolio can currently beat the rate of inflation.

Searching for yield in the low interest rate environment we have experienced over the past years has forced traditionally conservative investors into riskier assets.  The end of 2018 may have been volatile in fixed income markets but Erika Safran, the founder of Safran Wealth Advisors, says that "it's always time for bonds." She added, “There should be no fear of the bond market”, "unless, of course, you're investing on the long end or on low credit."  She believes that there should be no fear if you buy bonds for diversification and income, also stating that "Naturally, there is undue risk if you invest for capital appreciation."

What we are thinking?

We do not believe that a recession is likely in the near term, but we do agree that “it’s always time for bonds.” To produce high levels of income, many portfolios assume a variety of different types of risks. Our approach is to seek to build client portfolios with the most attractive levels of internal cash flows while limiting traditional bond market risks as reasonably as possible. Investment decisions should be based on long term plans and risk tolerance levels. We seek to provide value by filtering out the noise, making reasonable and informed decisions, and diversifying in preparation for volatility.  Our Current Income Portfolio is an attractive solution for investors looking for conservative allocations and additional yields in any interest rate environment. Let us show you how.
 

Source: https://www.cnbc.com/2019/03/04/now-may-be-the-time-to-use-bonds-in-portfolios.html

 


 

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The Roosevelt Investment Group, Inc. is an independent investment management firm that is not affiliated with any parent organization. The Roosevelt Investment Group, Inc. manages equity, fixed income, and balanced assets for primarily U.S. clients. The Roosevelt Investment Group, Inc. is an investment adviser registered with the U.S. Securities and Exchange Commission and notice filed in all 50 states.

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