DoubleEdged Rates
Higher rates are making bonds and other income generating investments look pretty enticing, at least on the surface. Some of these yields haven’t been at these levels in over a decade. It sounds like an easy win, right? Should Investors be cheering about the boost in interest income?
And then comes the plot twist… Rising interest rates aren’t just bringing more interest income they’re also hiking up interest payments. We’re seeing this in everything from mortgage rates to credit card interest payments. And this is where the math gets “interesting”. While interest income is getting a lift, it’s struggling to keep pace with the surge in interest payments.
So, where does that leave investors, especially those who depend on steady income? With treasuries, CD’s and investment grade bonds hovering around 5%, finding sufficient income is becoming a puzzle as the after-tax yields on these investments aren’t keeping pace with inflation.
Here’s where the importance of diversification comes in. We’re all about blending different income sources to help produce steady income flows. Our strategies cover everything from treasuries and investment grade bonds to high yield corporates, municipal bonds and structured products. As the financial landscape evolves, flexibility is key. As always, we’re here to help you navigate the twists and turns of the markets and help you stay on track to reach your financial goals.
To help mitigate risk, a sound investment process’ such as our approach that works to limit portfolio drawdowns can help investors navigate through volatile markets.
- Our strategies are built through continuous, innovative, quantitative research.
- We believe long-term investment success stems from the preservation of capital.
- Our mandates include tactical strategies that seek to help limit a portfolio’s drawdown.
As always, please reach out with questions, concerns, or if you’d just like to chat! You can always reach us directly at 518-877-6600 or via email at leo@nicoterawealth.com.
Kindest regards,
-Leo & Austin
If you know someone who may need help with their retirement plan or investment portfolio or would just like a 2nd opinion, please introduce them to us and we’d be happy to help!
Disclosure: This piece is for informational purposes only and contains opinions that should not be construed as facts. Information provided herein from third parties is obtained from sources believed to be reliable, but no reservation or warranty is made as to its accuracy or completeness. Charts and graphs are for illustrative purposes only. Discussion of any specific strategy is not intended as a guarantee of profit or loss. Past performance is not a guarantee of future results. Objectives mentioned are not guaranteed to be achieved. All performance referenced is historical. All indices are unmanaged and may not be invested in directly. Tactical allocation may involve more frequent buying and selling of assets and will tend to generate higher transaction costs. Investors should
consider the tax consequences of moving positions more frequently. All investing involves risk, including loss of principal.
Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC.