Listen to The ETF Store Show every Tuesday at 9am on ESPN 1510 as we cover everything you need to know about Exchange Traded Funds and the world of investing.
On our most recent radio broadcast, we discussed an area of investing that some people may find intimidating or try to avoid altogether – investing in bonds (or fixed income). We explained why fixed income is an important component of a well-diversified portfolio, but also examined how the current interest rate environment is making this endeavor more challenging than ever. Savers using fixed income products are being penalized by the low rates and those individuals who rely on fixed income to cover day-to-day expenses are being forced to lower their standard of living. To that end, given the historically low interest rates, we debated whether we’re currently in a bond bubble and if so, what that means for the fixed income portion of your portfolio. We also discussed the inherent challenges investors face when trying to select individual bonds or invest in actively managed fixed income mutual funds.
More importantly, we explained why we believe ETFs are the best way for investors to access the fixed income markets. Bond ETFs can provide broad exposure to a wide range of fixed income markets around the globe and do so extremely efficiently and cost effectively. We discussed some specific bond ETFs that you might consider as part of the foundation for the fixed income portion of your portfolio including tickers BND, TIP, and MUB. And, as always, we delivered our weekly market update and ETF Spotlight (ticker PCY). Listen to the full show here to learn more about investing in bond ETFs.
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