Schwab Center for Financial Research: Become more informed with insights and ideas.
Stay at the forefront of modern investing with insights and ideas from Schwab experts, including Kathy A. Jones, Senior Vice President and Chief Fixed Income Strategist, Schwab Center for Financial Research.
Review commentary on issues facing today’s investors, like:
- Floaters vs. Bank Loans: What You Should Know as Rates Rise
by Collin Martin
January 10, 2017
Rising interest rates add to the appeal of floating-rate coupons, but not all investments in this category offer the same risks and rewards.
Will the U.S. Dollar Bull Market Continue in 2017?
by Kathy A Jones
January 05, 2017
The U.S. dollar looks set to continue rising this year, but the risks to the rally increase as the bull market ages.
- Tweets by @KathyJones
Why invest in fixed income investments?
Whether your goal is to diversify your investments, save for the future, receive dependable income, or minimize taxes, fixed income investments may have a place in your portfolio.
Adding investment-grade bonds to a stock portfolio can help lower the portfolio's volatility over time.
Research shows that since 1976, negative annual returns have been uncommon in a broadly diversified bond portfolio.
Receive dependable income
Fixed income securities are typically designed to provide a regular stream of interest payments. See how bonds pay income.
Gain potential tax benefits
Many bonds have preferential tax treatment under which coupon payments are tax-free at either the federal or state level, or both. So it’s important to know how tax treatment varies by bond type.More Reasons to Invest in Fixed Income
Easily find and manage your fixed income investments.
Avoid the 3 most common errors investors make.
Keep your bond strategy on course by understanding the most common errors investors make and how to best avoid them:
- Chasing yield
- Buying and forgetting
- Failing to diversify
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Clients of independent investment advisors: You may also contact your advisor or call Schwab Alliance at 800-515-2157.
1. As of January 2016.
2. Conditions Apply: Trades in ETFs available through Schwab ETF OneSource™ (including Schwab ETFs™) are available without commissions when placed online in a Schwab account. Service charges apply for trade orders placed through a broker ($25) or by automated phone ($5). An exchange-processing fee applies to sell transactions. Certain types of Schwab ETF OneSource transactions are not eligible for the commission waiver, such as short sells and buys to cover (not including Schwab ETFs). Schwab reserves the right to change the ETFs we make available without commissions. All ETFs are subject to management fees and expenses. Please see Charles Schwab Pricing Guide for additional information.
3. Availability on Schwab BondSource as of January 2016.
Investors should consider carefully information contained in the prospectus, including investment objectives, risks, charges, and expenses. You can request a prospectus by calling 800-435-4000. Please read the prospectus carefully before investing. Past performance does not guarantee future performance.
Investment returns and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost.
Fixed income securities are subject to increased loss of principal during periods of rising interest rates. Fixed income investments are subject to various other risks including changes in credit quality, market valuations, liquidity, prepayments, early redemption, corporate events, tax ramifications, and other factors.
Restrictions apply: Online trades of Schwab ETFs are commission-free at Charles Schwab & Co., Inc. (Member SIPC), while trades of certain third-party ETFs are subject to commissions. Broker-assisted and automated phone trades are subject to service charges. Waivers may apply. See the Charles Schwab Pricing Guide for details. All ETFs are subject to management fees and expenses. An exchange process fee applies to sell transactions.
Schwab’s short-term redemption fee of $49.95 will be charged on redemption of funds purchased through Schwab’s Mutual Fund OneSource® service (and certain other funds with no transaction fees) and held for 90 days or less. Schwab reserves the right to exempt certain funds from this fee, including Schwab Funds®, which may charge a separate redemption fee, and funds that accommodate short-term trading.
Trades in no-load mutual funds available through the Mutual Fund OneSource service (including Schwab Funds), as well as certain other funds, are available without transaction fees when placed through Schwab.com or our automated phone channels. For each of these trade orders placed through a broker, a $25 service charge applies. Schwab reserves the right to change the funds we make available without transaction fees and to reinstate fees on any funds.
Charles Schwab & Co., Inc., Member SIPC, receives remuneration from fund companies participating in the Mutual Fund OneSource service for recordkeeping and shareholder services and other administrative services. Schwab also may receive remuneration from transaction fee fund companies for certain administrative services.
Charles Schwab & Co., Inc. receives remuneration from third-party ETF companies participating in Schwab ETF OneSource™ for recordkeeping, shareholder services, and other administrative services, including program development and maintenance. (0316-DG97)
Certificates of deposit available through Schwab CD OneSource typically offer a fixed rate of return, although some offer variable rates. They are FDIC-insured and offered through Charles Schwab & Co., Inc.
In the bond market, there is no centralized exchange or quotation service for most fixed income securities. Prices in the secondary market generally reflect activity by market participants or dealers linked to various trading systems. Bonds available through Schwab may be available through other dealers at superior or inferior prices compared to those available at Schwab. All prices are subject to change without prior notice. Schwab reserves the right to act as principal on any bond transaction. In secondary market principal transactions, the price will be subject to our standard markup in the case of purchases and markdown in the case of sales, and may also include a profit to Schwab in the form of a bid-ask spread. When trading as principal, Schwab may also be holding the security in its own account prior to selling it to you and, therefore, may make (or lose) money depending on whether the price of the security has risen or fallen while Schwab has held it. Schwab will not act as both principal and agent simultaneously in the same transaction.
This information is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, Schwab recommends consultation with a qualified tax advisor, CPA, financial planner, or investment manager.