Investment Structure for Fixed Income, Part I

Abstract

Parallel to the discussion of the investment structure for equities that I presented in Chapters 3 and 4 is a consideration of the investment structure for your fixed income investments (otherwise known by this asset class’s simpler and more common name, “bonds") in this chapter and in Chapter 6. As you can see, we have moved to a new box that is parallel to our equity structure considerations in our recurring Road Map to Financial Success. As with equities, once you have determined during the asset allocation step how much you should invest in fixed income in general, you must then answer the question of how you should construct your fixed income portfolio. However, because the fixed income structure that you select is independent of your equity structure and really should be chosen at about the same time, these are simultaneous and not sequential steps.