Income investors may have found 2013 frustrating as bond prices saw real volatility. This year is starting off on a better note. Let’s look at the high-yield market.
As economic data improves, prices of high-yield bonds should too. We have seen some of this already in 2014 and, even if this year isn’t as strong as last for high-yield investors, I can still say we believe in them.
These bonds are showing resiliency to slowly rising rates and fewer Fed bond purchases.
Many investment-grade bonds suffered last year and may continue to struggle so income investors will need to look at alternatives. High-yield/junk bonds are not for everyone so make sure you reach out to discuss how they may work for you.
Thanks to those of you that have already scheduled your conversion to our Strategic Wealth Management Program. Please email me to schedule your time if you haven’t yet.
LPL Financial will send 1099s out in February.
IRA owners over the age of 70 1/2 will soon receive notice of their Required Minimum Distributions for 2014. We have until the end of the year to satisfy this requirement.
Have a great week,
Susan R. Linkous
High-yield/junk bonds are not investment-grade securities, involve substantial risks, and generally should be part of the diversified portfolio of sophisticated investors.
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