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Craig Lundquist, MBA, ChFC®, CRPC®
VP of Wealth Management
651-773-2757
Kristin Becker
Senior Administrative Assistant
651-773-2821
Ideal Wealth Advisors
Located at Ideal Credit Union
8499 Tamarack Road
Woodbury, MN 55125
CRPC conferred by College for Financial Planning
May/June 2023
Exploring Fixed Income
Investors typically flee to bonds when equity markets decline, but this asset class encompasses a few different types of investments. Here’s a look at some of them:
Treasury Securities
This investment is your loan to the federal government. You can buy U.S. Treasury bills, which mature in a year or less. You may prefer Treasury notes, which mature between two and 10 years, or bonds, which mature after 10 years. Their interest rates are promised only when held to maturity, so you can lose money if you sell before that time.
When yields rise like they have with inflation, its increasingly likely that selling before maturity would net you less than the guarantee because prevailing higher yields are more attractive.
Agency Securities
This type of fixed income investment is either debt issued by a U.S. government or government sponsored entity (GSE). The latter, which includes agencies like mortgage providers Fannie Mae and Freddie Mac, does not offer a guarantee. The Small Business Administration and U.S. Postal Service are among other agencies issuing everything from bills to bonds.Corporate Securities
Interested in investing in a part of the world’s biggest companies, but you don’t want the risk of equities? Corporate bonds might be your alternative. While they are typically less volatile than stocks, they aren’t risk-free. The same bad news that affects stock prices, whether it’s the economy or poor company performance, can also distress bonds.Bonds are rated by ratings companies, and negative factors like these can lower the ratings of companies that issue bonds. When this occurs, companies typically must pay a higher interest rate on newly issued bonds. This means more risk, but potentially more reward. If you’re worried about risk, look for corporate debt that is secured, which collateralizes the debt.
*Prices of fixed income securities may fluctuate due to interest rate changes. Investors may lose money if bonds are sold before maturity. You should consider the securities’ investment objectives, charges, expenses, and risks carefully before you invest. The securities’ prospectus, which can be obtained by calling your financial representative, contains this and other information about the fund. Read the prospectus carefully before you invest or send money.
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Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Ideal Credit Union and Ideal Wealth Advisors are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using Ideal Wealth Advisors, and may also be employees of Ideal Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of Ideal Credit Union or Ideal Wealth Advisors. Securities and insurance offered through LPL or its affiliates are:
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