Asset Allocation
CONSIDER ADDING A SHORT MATURITY MUNICIPAL BOND FUND TO YOUR PORTFOLIO
CONSIDER ADDING A SHORT MATURITY MUNICIPAL BOND FUND TO YOUR PORTFOLIO
Short term muni fund attributes:
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- Tax free interest
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- Less sensitive to rising interest rates
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- Flexibility to reinvest as rates rise
CONSIDER USING MULTIPLE INVESTMENT APPROACHES
CONSIDER USING MULTIPLE INVESTMENT APPROACHES
Matthew Peron is using combination of active, passive, fundamental and quantitative
OWN SOME BONDS TO DIVERSIFY YOUR PORTFOLIO
OWN SOME BONDS TO DIVERSIFY YOUR PORTFOLIO
- Investment grade corporate bonds and Treasury bonds have been non-correlated assets
- Provide a counterweight to stock prices
CONSIDER AN EQUALLY WEIGHTED INDEX ETF
CONSIDER AN EQUALLY WEIGHTED INDEX ETF
- Equal dollar weight to all stocks in S&P 500
- Primary advantage over market-cap weighting is underweighting of potentially expensive mega-cap stocks and overweighting of smaller cap stocks
CONSIDER SOME PREFERRED STOCKS FOR YOUR PORTFOLIO
CONSIDER SOME PREFERRED STOCKS FOR YOUR PORTFOLIO
PREFERRED STOCKS:
- A kind of hybrid security, sits between bonds and stocks in company’s capitalization structure
- Junior to bonds, but senior to common stocks in claims on assets
- Currently yield more than investment grade bond equivalents
- Bond interest is taxed at regular personal income tax rate
- Most preferred stock dividends taxed at lower long-term capital gains rate
Burt Malkiel’s: “The ‘Preferred’ Path to Higher Returns”
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