Selecting fixed income
Learn how to decide which fixed income investments best fit your needs.
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Define your goals.
Define your goals
Whether you're looking to save for a near-term expense, add stability to your portfolio, or create a revenue stream, there are fixed income products for you to consider.
- Financial goal
- Fixed income products to consider
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Financial goalI want to protect my investment>Fixed income products to consider
- Short-term CDs (Certificates of Deposit)
- Short-term Treasuries
- Short-term investment-grade municipal or corporate bonds
- Short-term bond funds
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Financial goalI want to add income and balance to my portfolio>Fixed income products to consider
- Short- and intermediate-term Treasuries
- Short- and intermediate-term agency bonds
- Short- and intermediate-term international developed-market bonds
- Short- and intermediate-term investment-grade corporate or municipal bonds
- Short-term to intermediate-term bond funds
- Agency mortgage-backed securities
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Financial goalI want to generate more interest income>Fixed income products to consider
- Long-term Treasury or corporate or municipal bonds
- Emerging market bonds or bond funds
- Preferred securities or preferred securities funds
Select an investment allocation strategy.
Select an investment allocation strategy
Create a mix of fixed income investments that balance your portfolio to help meet your goals. These five sample asset allocation plans show how fixed income can be adjusted in your overall portfolio.
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Conservative
For investors who seek current income and stability, and are less concerned about growth.
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Moderately conservative
For investors who seek current income and stability, with modest potential for increase in the value of their investments.
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Moderate
For long-term investors who don't need current income and want some growth potential. Likely to have some fluctuations in value, but less volatility than the overall equity market.
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Moderately aggressive
For long-term investors who want good growth potential and don't need current income. Likely to have a fair amount of volatility, but not as much as a portfolio invested exclusively in equities.
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Aggressive
For long-term investors who want high growth potential and don't need current income. May have substantial year-to-year volatility in value in exchange for potentially high long-term returns.
Want help determining an appropriate allocation type for you?
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Want help determining an appropriate allocation type for you?
Use our Interactive Profile Questionnaire to find a suitable investment strategy.
Determine your time frame and the level of risk you're comfortable with.
Maturity timeframe
Traditionally, longer-term bonds produce higher yields but also have higher interest rate risk—the risk that the value of a bond will fall if interest rates rise. Thus, your time frame may be one factor in determining the amount of interest rate risk you're willing to take on.
- Low interest rate risk
- Medium interest rate risk
- High interest rate risk
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Maturity timeframe>Low interest rate risk0 - 4 years average maturity>Medium interest rate risk4 - 10 years average maturity>High interest rate risk10+ years average maturity>
Credit risk
It's also important to consider credit risk—the chance that the issuer of a bond will not be able to repay its debt obligations. With riskier lenders, the return may be higher, but the odds of an investor losing their principal rise.
- Low credit risk
- Medium credit risk
- High credit risk
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Fixed income products>Low credit riskCDs, Treasuries, agency bonds, agency mortgage-backed securities>Medium credit riskInvestment-grade corporate or municipal bonds, international developed market bonds>High credit riskPreferred securities, emerging market debt, high-yield bonds, high-yield municipal bonds, bank loans>
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