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.
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.
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.
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.
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.
In 2017, Americans gave more than $358 billion to charity with nearly three-quarters of that amount coming directly from individuals. And while much of these donations come in the form of direct cash gifts, more and more individuals are turning to planned.
Learn the differences between traditional IRAs and Roth IRAs for the 2019 tax filing season.
The financial obligations associated with caring for an aging parent can often coincide with other priorities. Of course you want to help out when possible; just don’t jeopardize your own future.
Faced with the potential to live 30+ years in retirement, the traditional approach to retirement income may no longer make sense.
Big life changes can dramatically change how much money you’re able to save each month. Keep in mind these rules of thumb when life shakes things up.
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