Swapnil Rege on Fixed Income as an Investment Strategy
The Benefits of Fixed Income Securities
Fixed income securities are a means to preserve capital, diversify an investment portfolio, and increase the financial security of one’s assets.
What is a Fixed Income Security?
Investments in bonds are often less volatile than stocks, offering investors a sense of stability, and are a vital component of an asset allocation strategy. Swapnil Rege — an experienced Fixed Income Portfolio Manager, states that the fixed asset class works well for investors who are looking to generate a steady stream of income. Similarly, individuals often rely on fixed investments during economic downturns as they often outperform other equities. He claims that sources of fixed income offer individuals peace of mind, and outlines some of the advantages of the investment strategy.
Portfolio Diversification
The goal of diversification is to reduce a portfolio’s level of risk by investing in multiple asset categories. Fixed income is less volatile than equities and as a result, can offset higher risk investments during market fluctuations. Bonds are often the top choice for investors looking to create a durable portfolio and protect their capital long-term. Ultimately, fixed income securities are seen as minimal risk investments and are a way to stabilize one’s financial return. Swapnil Rege encourages individuals to review their portfolio regularly to ensure all assets are balanced and to mitigate potential risks.
Steady Income
Fixed income investments will not provide a significant return through capital appreciation but offer a reliable and steady source of income. Common fixed income securities include bonds, treasury bills, and asset-backed securities. Those who have fixed income securities receive periodic dividends and interest payments from the issuing company for a specific number of years with guaranteed rates until maturity. According to Swapnil Rege, fixed income securities carry predictable returns and generate consistent cash flow.
Financial Stability & Capital Preservation
Fixed income assets are a proactive means to preserve capital and offer investors a sense of financial stability. A bonds principal must be repaid to an individual at the time of maturity, and because the bond is backed by the United States Government, there is a minimal chance that the security will ever default.
Knowing Your Financial Options
Swapnil Rege states that before making long-term investment decisions, an individual should have a comprehensive understanding of their financial options. With an extensive professional resume, he understands the ins and outs of fixed income investments and recommends seeking the expertise of a trusted financial professional. Ultimately, fixed income assets are a way to counteract various other high-risk equity investments and should be an essential component of one’s investment portfolio.
