About Fixed Interest Securities

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About Fixed Interest

Summary Part 3

3. WHY INVEST IN FIXED INTEREST SECURITIES?

Many investors choose fixed interest securities over shares because they want a reliable income stream, rather than relying on unpredictable dividends.

They also want to distance themselves from the price volatility associated with shares.

However, many investors who hold more volatile stock use bonds and debentures as an instrument to reduce the risk in their portfolios.

A portfolio consisting of equal portions of bonds and shares can achieve 80% of the returns of a pure equity portfolio with only half the risk.

So every portfolio can benefit from the addition of fixed interest securities.

OTHER TOPICS:

1. What are fixed interest securities?

2. What types are available?

3. Why invest in fixed interest securities?

4. Australians are underweight in fixed interest securities

5. What are the risks of fixed interest securities?

6. How to invest in fixed interest securities

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