Research & News
Boomer Retirement Income Smackdown: Bond Ladders vs. Annuities
As the first wave of Baby Boomers turns 65 this year, retirement income is a growing issue for advisors and their clients. The question often comes down to this: What’s the better income producer, a bond ladder or an annuity, and how much will it cost? Read More…
A Look at Asset Dedication’s Virtual Business Model
A virtual business model built on best-of-breed technology proves to be the ideal solution for a small subadvisory firm with big dreams. Read More…
Safety of Investment Grade Bonds
With a few alarmists calling for a massive increase in municipal bond defaults and many investors still stinging from the Lehman Bros. bond defaults, should investors be worrying about their bonds? High quality municipal and corporate bonds have long been considered “safe” asset classes. Volatility in the stock market is enough to keep many investors up at night and now many may be losing sleep over their bonds too. This paper takes an historical look at the risks and relative safety of high quality municipal and corporate bonds. We will show that although investors need to carefully analyze their bond investments, they can still rely on high rated investment grade bonds to deliver predictable income and relative stability in their portfolios. Download Now…
Should you Christmas-shop the market? It turns out there’s a seasonality to finance, too
Seasonality is a familiar concept when it comes to retail sales. December is always the biggest month, with sales about 20 percent higher than the average month. Its seasonal factor is therefore 1.20; to get the seasonally adjusted figure, divide the raw numbers by 1.20. Read more…
The Cost of Waiting for Interest Rates to Rise
Today’s interest rate environment presents financial advisors with a conundrum – do I stay on the sidelines and wait for rates to rise before re-allocating my clients’ portfolios, or do I jump in now….what are the costs of waiting for rates to rise? We evaluate this question in the context of income-matching portfolios constructed with individual bonds. Income-matching portfolios consist of a series of individual bonds held to maturity whose redemptions and coupon payments provide cash flows that precisely match a client’s target income stream. We will compare the income-matching strategy to investing in short duration bond funds, holding cash or buying a CD to show it is better for investors to buy now than wait for rates to rise. Download Now…
Why the only thing bigger than the bond bubble is the bubble of bond doom-sayers
When everyone knows something is a fact, I am immediately suspicious. Pundits — and respectable advisors, seers, prognosticators, economists and other ‘experts’ — are all speaking matter-of-factly about the bond bubble. A competitor of ours had four articles in its print edition this week mentioning the bond bubble. I looked around for a differing perspective from someone intellectually equal to the task and Brent Burns, thankfully, stepped into the breach. Read More…