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There are many different approaches and strategies for retirement investing that might appeal to you. But how do you tell if a certain strategy works for your situation? When evaluating different ...
Dedicated portfolio theory, in finance, deals with the characteristics and features of a portfolio built to generate a predictable stream of future cash inflows.This is achieved by purchasing bonds and/or other fixed income securities (such as certificates of deposit) that can and usually are held to maturity to generate this predictable stream from the coupon interest and/or the repayment of ...
For example, let’s say that right now, you have 10% in cash, 40% in stocks, and 50% in bonds. You might want to adjust these percentages based on your needs, updated expenses, budget planning ...
A financial advisor told me the pros of building a two-part bond ladder (three-year Treasurys and 10-year corporates) to generate fixed income and cover required minimum distributions (RMDs).
Individual bonds provide the ability to match the cash flows needed, which is why the term "cash flow matching" is sometimes used to describe this strategy. Because the bonds are dedicated to providing the cash flows, the term "dedicated portfolio" or “asset dedication” is sometimes used to describe the strategy.
An exchange-traded fund (ETF) is a type of investment fund that is also an exchange-traded product, i.e., it is traded on stock exchanges. [1] [2] [3] ETFs own financial assets such as stocks, bonds, currencies, debts, futures contracts, and/or commodities such as gold bars.
Bonds often play an important role in a well-rounded investment portfolio. While both municipal and corporate bonds can generate consistent income, they are distinct in several ways that can ...
But investors will often need more than one or two bonds to create a bond portfolio that meets their needs. While it may take serious work and know-how, investors have a few time-tested strategies ...