Via InquirerUSA When you read “What is a fixed income?” you probably thought we were referring to employment. However, we were talking about fixed-income investments.
Fixed income securities have minimal risk, so they're a good pick for first-time investors. Learn about the available options and how to start investing.
AnnuitiesThese options have their perks and quirks, so none of them are perfect. Match the viable choices with your investment strategy.Certificates of deposit (CD)These allow you to save money at a fixed interest rate for a certain period. They’re also known as time deposits.
You start by purchasing these certificates of deposit. Then, you must leave your money until the maturity date. Before the deadline, you receive payment typically twice a year.Banks and credit unions provide regular CDs. On the other hand, brokerage firms grant their options.
Recently, a new type calledhas emerged. However, most investors frown upon them and prefer the classic certificate of deposit instead.BondsPurchasing bonds means lending to your government, municipality, or corporation. Hence, the bond market options can be classified according to their issuers. headtopics.com
As the name suggests, private businesses issue corporate bonds. Their interest rates and prices depend on a company’s creditworthiness and financial stability.They also issue junk bonds or high-yield bonds. However, they’re also high-risk since its issuer might not be able to pay principal nor interest.
Local governments issue municipal bonds. Meanwhile, the US Department of the Treasury issues government bonds like treasury bills, treasury bonds, and t-notes.Bond fundsIt’s a type of investment company that invests mainly in bonds and other fixed income securities.
Bond fundsalso refer to mutual funds, bond ETFs, and unit investment trusts (UIT).Some people believe that bond funds pose no risk whatsoever. Contrary to popular belief, investors may lose money in bond funds due to multiple factors.What’s more, there are ultra-short funds, investments for debt securities with too short maturities. Investors should watch out for the higher risk compared to other investments, though.
Money market fundsSimilar to bond funds, these invest in short-term debt securities. The brief maturity may limit uncertainty and risk so that investors may gain quick yet meager returns.Just like how bonds mature,money market fundsalso pay dividends periodically. Moreover, they’re usually liquid, meaning you may receive funds after a few business days. headtopics.com
Unfortunately, market turmoil may cause them to become illiquid. Worse, you may lose your principal. The government doesn’t back them, so expect handling market losses alone.AnnuitiesThese fixed income products are contracts between investors and insurance companies. They ensure income periodically for the rest of your life!
You may choose fixed-rate annuities that guarantee interest rates of around 5%. On the other hand, variable-rate annuities pay based on how your option performs.However, their interest payments are far smaller compared to other securities. Worse, the scant returns are offset further by numerous fees. Some investors might find them worthwhile, though.
Benefits of fixed incomeAll investments have their potential benefits and risks. The key to successful investing is finding out which ones best suit your strategy.Most investors swear by the well-rounded portfolios. They don’t limit themselves to one kind of investment. However, your portfolio mix will entirely depend on you.
As a result, they often include fixed income securities along with their stocks. Their benefits go beyond the safe and steady gains:1.Diversification– Most people invest in the stock market. However, it’s subject to numerous factors such as business performance and economic downturns. Fixed income investments allow them to cushion potential stock market losses. headtopics.com
2.Capital preservation– Retirees may replace the volatility of stocks for the assurance of fixed income securities. However, be mindful of possible inflation risk.3. Read more: Inquirer »
ABS-CBN Shutdown | ABS-CBN News
It has been a year since ABS-CBN’s free TV and radio channels were forced to go off the air by the government in the middle of a global pandemic. Here is a collection of stories, images and videos from those most affected by the night when ABS-CBN screens turned black, its radio channels went silent, and there was nothing left but dead air.
SM Investment first quarter net income up 5 percent to P9.5 billionSM Investments Corp said Wednesday its consolidated net income for the first quarter of the year rose 5 percent to P9.5 billion compared to P9 billion in the same period last year.
Warren Buffett says US economy's unexpected strength benefits BerkshireBerkshire Hathaway's 1st quarter operating profit rises 20% to about $7 billion, while net income including investments totals $11.7 billion.
MPIC on track to achieve P12-B income goalInfrastructure holding firm MPIC expects to hit its core income guidance of P12 billion this year even as the reimposition of tight lockdown protocols has curbed the recovery of its water, tollroad and railway businesses. | Philbizwatcher
NCR, Central Luzon, Calabarzon economies contracted worse than rest of PHThe Philippine Statistics Authority said the NCR, Central Luzon, and Calabarzon all saw their economies suffer double-digit contractions in 2020, worse than the national GDP contraction of 9.6 percent for the year.
NEDA: Inflation can be lowered to 3.8% through lowering tariffs on import pork“We cannot afford that the people will have both an income problem and a price problem,' Acting Socioeconomic Planning Secretary Karl Kendrick Chua says. Yung infected pork ba galing China ang papasok sa Pinas? Yung na-ban sa US, sa Pinas ibabagsak. but we have more problem than that. we have a leadership breakdown. dutertePALPAK duterteTAMAD duterteTRAYDOR duterteCORRUPT duterteRESIG N 👊🏼💩