In this second article of the series we will delve into the two main risks faced by bond investors – the risk of not being paid back – or credit risk – and the risk of the market price of your bond investment moving due to a change in the interest rate or yield of the bond – called interest rate risk.
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We've updated our Sample Portfolios for the month.
We recently covered the basics of bonds in a multi part series. We now move on to a slightly more advanced look in more detail at the way we think about building portfolios here at FIIG, in terms of specific client targets and the way we manage and mitigate the various risks that apply to fixed income portfolios.
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We've updated our Sample Portfolios for the month.
In this final edition for the Bond basics series we will explain the capital structure – one of the key pieces of information about the risk of your bond – and see how it works in practice.
In this article we will explain the basics around a bond itself, what the market looks like and how they work.
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We've updated our Sample Portfolios for the month.
The key point to remember here is that bonds are not aiming to outperform equities. We are aiming to bring something different to an investment portfolio.
When assessing a company from a bond perspective, despite some similarities, there are also some critical differences to the criteria we use for assessing a company for equity investments.
Bonds are always lower risk than shares in the same company but do carry some of the same risks. They also have unique risks that can be used to your advantage under various economic conditions.