A brief case for high-quality fixed income in portfolios of individuals at or near retirement:
High-quality fixed income yields have more than doubled from their historic lows. Without stretching for yield a portfolio can be built of investment grade corporate bonds with a yield over 4%.
While I dont believe the direction of the bond or stock market can be predicted, stocks have been going up for a quite a while. Its not difficult to make the case that the average annual return for stocks over the next 3-5 years might not exceed 5%.
For investors at or near retirement high quality fixed income looks pretty attractive at current levels.
At WealthFactor we are building diversified, laddered bond portfolios for .35% fees. If you are paying an adviser 1% to invest your assets in fixed income mutual funds that charge their own fee the math just doesn't work.
The mass-advisers inefficient business structure is forcing them to recommend portfolios that are unnecessarily risky.
If you are concerned about fees or risk please consider a complimentary WealthFactor portfolio evaluation.
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