Investing in Bonds | SunTrust Investment & Retirement

Investing in Bonds

Bonds may add stability, diversity and income to your portfolio.

Bonds act like I.O.Us from the U.S. government, municipalities or corporations. Essentially, you are lending money to that organization for a certain amount of time which they agree to pay back with interest. When you’re young, you’ll probably rely more heavily on the long-term growth potential of stocks. But as your retirement time horizon shortens, adding income-generating investments like bonds can help minimize the impact of market swings.

Shifting Your Mix of Stocks and Bonds

While individual investors will have different goals and therefore different needs, over time you’ll likely want to gradually shift your asset allocation. You can accomplish this by adding individual bonds to your portfolio, or more conveniently by purchasing shares in one or more bond funds – mutual funds that pool investor assets to buy a large portfolio of bonds.

How bond prices and interest rates typically interact

As interest rates fall, bond prices typically rise. Conversely, as interest rates rise, bond prices tend to fall. During times of rising rates, it’s often better to hold shorter duration bonds; as each bond matures, the proceeds can then be reinvested into a new bond paying a higher interest rate.

Your SunTrust Investment Service advisor (STIS) can be an invaluable aid in helping you structure a well-diversified portfolio, including bonds and/or bond funds.

How bond prices and interest rates typically interact

Why add bonds to your portfolio?

  • Helps diversify a portfolio
  • Allows you to gradually reduce investment risk as you get closer to retirement
  • Generates portfolio income which can be reinvested or taken as income

Why invest in bonds through SunTrust?

  • Select from a wide range of corporate, municipal and U.S. government bonds and bond funds
  • Work collaboratively with a knowledgeable, local STIS advisor to align specific investments to your short- and long-term goals
  • Get 24/7 access to your accounts, positions, and balances
  • Access fixed income analysis and insights from SunTrust and independent analysts

Learn how our SunTrust SummitView goals-based planning approach can give you a clear view into all your stocks, bonds, retirement and savings accounts, allowing you and your advisor to better align your investments to your goals and objectives.

DISCLAIMERS

Investing in the bond market is subject to certain risks, including market, interest rate, issuer and inflation risk; investments may be worth more or less than the original cost when redeemed. The value of most bond strategies and fixed income securities are impacted by changes in interest rates. Bonds and bond strategies with longer durations tend to be more sensitive and more volatile than securities with shorter durations.

Diversification does not ensure against loss and does not assure a profit.

 

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