Q: For someone looking at a retirement in 2 - 3 years that will be funded by personal investments, I am having trouble formulating an investment strategy that would currently include fixed income investments. Fixed income securities seemed destined to only go down in value in the foreseeable future as interest rates rise so why would I want to invest in them? Pipelines, utilities and telecoms may also drop but their yield is currently quite good and secure and capital appreciation is always a possibility, if not a probability, in the longer run.
It seems to me that much of the argument for holding fixed income assets is to ensure the preservation of one's capital. But if I am ultimately going to invest largely in quality dividend paying stocks eventually anyway to fund my retirement is capital preservation the main concern? Isn't dividend "preservation" more the issue?
I feel like I am missing something because it seems that all advisors, planners and analysts strongly suggest there be some fixed income in a portfolio, especially as retirement nears. What are your thoughts?
Appreciate the insight.
Paul F.
It seems to me that much of the argument for holding fixed income assets is to ensure the preservation of one's capital. But if I am ultimately going to invest largely in quality dividend paying stocks eventually anyway to fund my retirement is capital preservation the main concern? Isn't dividend "preservation" more the issue?
I feel like I am missing something because it seems that all advisors, planners and analysts strongly suggest there be some fixed income in a portfolio, especially as retirement nears. What are your thoughts?
Appreciate the insight.
Paul F.