Do You Understand How Bonds Work?
Before we can discuss bonds in depth, it is important that we establish a common understanding of what bonds are and how they work. As a starting point, a bond is a contractual obligation to make a series of specific payments on specific dates.
3 Ways To Incorporate Bonds Into Your Retirement Strategy
Bonds can be incorporated directly into a retirement strategy in three broad ways:
1. An assets-only approach to build a total returns investment portfolio,
2. Matching the duration of bond funds to the duration of the retirement liability, and
3. Holding individual bonds to maturity to generate the desired cash flows to fund expenses on an ongoing basis throughout retirement.
Understanding Bond Returns
Bonds may not be as flashy as stocks, but they form the bedrock of your portfolio, so you should understand how they work.
Do You Need an Emergency Fund in Retirement?
Most retirees struggle with how to deal with their emergency fund. It’s there to help you deal with, well, emergencies. Retirees are just as prone to emergency as others, if not more so.
What Happens to Your Pension If Your Former Employer Goes Bankrupt?
Pensions, along with Social Security, are the core of most people’s reliable income in retirement – they’re what many people plan to live off of, or at least use to cover their most essential expenses. If you’re receiving a pension, or have one coming, you’ve probably contributed to your pension fund for years, maybe decades, […]
Diversification Works In A Crisis (But It Doesn’t Work Miracles)
There are a lot of myths about diversification. Today, I want to address a pernicious lie floating around out there that diversification only works when times are good.
How to Use Life Insurance
Life insurance can be confusing. Especially since so many people want it to be. But it doesn’t need to be. Life insurance is one of the simplest financial tools out there – as long as you use it correctly. There are two basic components to your wealth: Your Financial Capital – All the stuff you […]
How Does Diversification Actually Work?
Diversification is a good thing. Nearly everyone agrees that it’s just about the only free lunch in finance.
But not many people stop and think about how diversification actually helps them, beyond the general “don’t put all your eggs in one basket” argument.
What is a Bond Ladder?
Bond ladders sound like another complicated finance concept only investing geeks understand, but they’re actually pretty simple. The easiest way to view them is as though you’re setting up your own annuity by prepaying for at least some of your income in retirement.
A Simple Way To Keep Your Portfolio In Line
Investing isn’t simply picking the best funds or building your perfect portfolio. Keeping your portfolio in line over the long term is just as important (if not more so).
