Chance Carson

High Yielding Retirement Strategy Utilizing Bond ETFs

Obi-wan,

Great admonition to be wary of getting too overly concentrated in debt securities right now with interest rates being so low. I agree wholeheartedly. You may have missed, however, that seven of the fifteen asset classes we recommended for retirees are equity asset classes, NOT debt.

And as you know, investing in debt strategies needs to be done all along the interest rate curve, carefully laddering bond portfolios into short and intermediate maturities.

A fixed income investor needs to fully understand the four major risks in debt investing: credit (issuer) risk, tax risk, inflation (purchasing power) risk and and especially, as you correctly point out, interest rate risk.

Selecting the correct range of durations and maturities in a bond portfolio is critical indeed.

Thanks for your reminder ,
Chance Carson

High Yielding Retirement Strategy Utilizing Bond ETFs

Hi Emerald,

I'm not sure what point you're meaning to communicate.. We've mentioned 15 different asset classes which have fairly robust distribution rates (from a low of 5.1% for Munis and Emerging Market debt to a high of 13.3% for non-investment grade corporates).

The average distribution rate for all 15 asset classes is 8.25%. To us, this seems like an intriguing and well diversified place for retirees to find remarkable income in this scary market...

Did you mistake the current distribution rates we quoted to be our recommendation of what per cent of one's portfolio to allocate to each asset class? Or were you simply remarking about how remarkably high distribution rates have been driven.

On Feb 09 11:11 AM Emerald wrote:

> Your distribution list adds up to 123.8%. Ouch!