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Issues to Consider With a High-Dividend Approach

With the current low yields on fixed income securities, the financial media have produced many articles regarding high-dividend strategies. The following discusses two fundamental flaws with using these strategies as alternatives to either high-quality fixed income portfolios or to other equity strategies. While the financial media tout high-dividend strategies as alternatives to other prudent investment …Read More.

Understanding Interest Rate Risk

Many investors have responded to worries about interest rate risk by keeping their fixed income investments restricted to money market accounts and very short-term fixed income securities. The following discusses the risks of following such a strategy and what should be considered. Over the past year, we have received questions about the potential impact of …Read More.

Corporate Bonds Versus Treasury Bonds

While it is true that corporate bonds have outperformed Treasuries, we have not and do not recommend owning corporate bonds for two main reasons: 1) they contain some of the same risks that stocks do; and 2) the historical outperformance has been very small. One of the most important concepts of fixed income investing is …Read More.

Interest Rates and Expected Returns

Many people are questioning whether they should stay in fixed income or branch out to other strategies with higher expected returns, due to low interest rates. The following discusses viewing expected returns between investment strategies. The low interest rate environment has many people wondering about using their fixed income allocation for other strategies, such as …Read More.

Ratings Agencies and the Municipal Market

In this article, we review our thoughts on the value of credit ratings within the municipal market. Even though ratings agencies appear to have misjudged the credit worthiness of some mortgage-backed securities leading up to the financial crisis of 2007–2009, we believe their ratings are still of importance in assessing the default risk of municipal …Read More.