A Publication of WTVP

Balance is just as important in your portfolio as it is in riding a bike. For many investors, fixed-income investments can help achieve the desired balance by helping to reduce portfolio volatility and provide regular income.

Asset Allocation is Key
Fixed-income investments, including bonds, are an important component in diversifying your portfolio to help reduce investment risk, since bond prices and stock prices often move in opposite directions and bonds provide income. How you allocate your portfolio among stocks, bonds and cash will depend on your individual circumstances and financial goals, as well as how much risk you are willing
to take.

As part of the financial planning process, you’ll want to work with your financial advisor to develop an asset allocation plan customized to your needs. As your circumstances change over time, your financial advisor can work with you to adjust your asset allocation plan. For example, as you get closer to retirement, it may be important to increase your fixed income allocation to help reduce investment risk.

Broad Selection Available
Investors can choose from a wide variety of taxable and tax-exempt fixed-income instruments, including bonds issued by corporations, states, municipalities, FDIC-insured banks, federally sponsored agencies and U.S. Treasury securities. Maturities can range from short to long.

Investors might select bonds for their portfolios for a number of reasons, including:

Review Allocations With Your Advisor
If your portfolio doesn’t include fixed-income investments, talk with your financial advisor to determine what role these securities should play in your portfolio. If your investments do include fixed-income securities, review your portfolio with your advisor on a regular basis to determine how current market conditions may affect your allocation mix and make the necessary adjustments. iBi