What Are Fixed Income Investments Services?
Fixed-income investments focus on
very low-risk investments that pay out a return on a regular schedule and
return principal when the investment matures. These investments typically offer
a higher yield than your standard savings account and may help provide
consistent income over time. This investing strategy is often appropriate for
older investors or those who cannot stomach large market swings in their
portfolios. Examples of fixed-income investments include bonds, bond mutual
funds, certificates of deposit (CDs), and blue chip stocks.
In general, a fixed-income
investment involves loaning money to a government entity or corporation in
exchange for an agreed-upon interest payment regularly until the security
matures. While these securities tend to be a conservative way to generate
steady returns, they’re not without their share of risks, according to Scott
Kyle, chief executive officer and founder of Coastwise Capital Group.
For instance, if the issuer of
the bond fails to pay back the principal at maturity or experiences financial
difficulties that lead to bankruptcy, you will likely lose some or all of your
initial investment. Inflation, the increase in the price of goods and services,
also can eat into the value of interest payments. And because the yield on most
Peregrine Private Capital
is inversely related to interest rates, they may
experience a loss of value when interest rates rise.
TD Ameritrade offers a wide
variety of fixed-income investments, including bonds and bond mutual funds. You
can use these assets as a complement to other investments in your portfolio,
helping diversify your overall exposure to risk. But it’s important to keep in
mind that these securities are subject to many unique risks, such as changes in
credit quality, market valuations, liquidity, prepayments and early redemption,
corporate events, tax ramifications, and other factors.