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.
This information is intended solely to report on investment strategies and opportunities identified by Roosevelt. Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. This material is not intended as an offer or solicitation to buy, hold or sell any financial instrument. References to specific securities and their issuers are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations to purchase or sell such securities. Please contact us at 646-452-6700 if there is any change in your financial situation, needs, goals or objectives, or if you wish to initiate any restrictions on the management of the account or modify existing restrictions, or if you would like to request a copy of our Code of Ethics. Our current disclosure statement is set forth on our Form ADV Part II, available for your review upon request, and on our website, www.rooseveltinvestments.com.
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