In the year 2020, lower coupon bonds are cannibalizing higher coupon bonds.
These are the investment guidelines our firm uses. We invite you to adapt it and share it with your clients.
Among advisors, 4% is the magic number for retirement planning. We are told that the only way to achieve this return is to allocate a substantial amount to risky assets, such as stocks, real estate and alternative investments. It is possible, however, to earn a return of 4% from the lowly, misunderstood tax-exempt municipal bond.
Investors generally regard municipal bonds as one of the safest investments – only Treasury bonds are less risky. But many of those bonds carry hidden risks. A proposed new SEC rule change will go a long way toward making investors aware of those risks.
