Fixed income investors are likely focused on two big early November events: the presidential election and the Federal Reserve’s monetary policy decision. On this episode, host Mike Townsend is joined by Collin Martin, a fixed income strategist at the Schwab Center for Financial Research, for a timely conversation on how bond markets typically react to elections, how investors who are anxious about the election can use bond strategies to lock in good rates and help limit volatility in their portfolios, the outlook for another rate cut by the Fed, and why there may be opportunities now for investors interested in longer-duration bonds. Collin offers his perspective on corporate bonds, high-yield bonds, and Treasury Inflation-Protected Securities, or TIPS.
Mike shares what he will be watching for on election night, as well as an update on the IRS inflation adjustments to key provisions of the tax code, including individual income tax brackets and the estate tax. Mike also references this recent IRS publication on inflation adjustments to key tax provisions ( .
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IMPORTANT DISCLOSURES
Investors should consider carefully information contained in the prospectus, or if available, the summary 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.
The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.
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Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve.
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.
Lower rated securities are subject to greater credit risk, default risk, and liquidity risk.
Diversification and asset allocation strategies do not ensure a profit and cannot protect against losses in a declining market.
Treasury Inflation Protected Securities (TIPS) are inflation-linked securities issued by the U.S. Government whose principal value is adjusted periodically in accordance with the rise and fall in the inflation rate. Thus, the dividend amount payable is also impacted by variations in the inflation rate as it is based upon the principal value of the bond.
It may fluctuate up or down. Repayment at maturity is guaranteed by the U.S. Government and may be adjusted for inflation to become the greater of either the original face amount at issuance or that face amount plus an adjustment for inflation.
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The information and content provided herein is general in nature and is for informational purposes only. It is not intended, and should not be construed, as a specific recommendation, individualized tax, legal, or investment advice. Tax laws are subject to change, either prospectively or retroactively. Where specific advice is necessary or appropriate, individuals should contact their own professional tax and investment advisors or other professionals (CPA, Financial Planner, Investment Manager) to help answer questions about specific situations or needs prior to taking any action based upon this information.
There are risks associated with investing in dividend paying stocks, including but not limited to the risk that stocks may reduce or stop paying dividends.
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Past performance is no guarantee of future results, and the opinions presented cannot be viewed as a…
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