Portfolio Picks – Fixed Income Investments
After narrowing down my options for my fixed income portion of my retirement funds, the first step it took was to place them into my watch list before going into my portfolio.
Stock Watch List is perfect for the screening process that I go through and where I get to filter out my top picks.
Step two – pressing the buy buttons.
Related Read: How Important is an Investing Budget?
What Percentage Should I Invest in Fixed Incomes?
The ‘rule of thumb’ is to take your age and that’s your percentage. For instance, I’m 42 years old. That means 42% of my portfolio should be in fixed incomes.
But bonds aren’t what they used to be. And I’d much rather find healthy dividend stocks to work with that bring in great profits (if you choose the right ones).
I decided to take 10% for my main portfolio ($4,500) and 10% for my retirement ($1,750).
How I Came Up With My Fixed Income Investments Picks
Instead of going with individual bonds, which require me to put up a huge investment of a minimum $5,000 – $10,000 I decided on ETF’s that diversify in the different sorts of bonds and there are no limits. And the way the coupon is handled, it is a combination of all the bonds that is paid as a dividend.
With a 10% distribution for my portfolio, I broke it down even further.
Fixed Incomes have several categories of bonds, this is how I’m investing in them:
- 5% Corporate Bonds
- 5% High Yield Bonds – Junk Bonds
Why did I not include any treasury bonds and government municipal bonds which are the lowest risk? Exactly because of that. They are the lowest risk, but also the lowest reward.
As long as I pick good options, keep an eye on them, I shouldn’t have any problems.
Disclosure: This is my choice and risk tolerance. Everyone should go with what they feel most comfortable.
Recommended Read: How to Start Value Investing
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