Fixed-income investments: Three factors to consider when rebalancing your portfolio
Fixed-income investments are investments that provide a fixed or stable return on investment over a specified period of time. These can be used by investors to diversify their portfolio given these are not as risky as derivatives and equities. Because the returns in fixed-income investments are reliable, it is particularly popular amongst senior citizens.
“Bonds and other fixed-income securities are essential components of diverse portfolios, and keeping the right mix of these securities can have a big impact on an investor's overall financial health. The idea of asset allocation and the significance of regular rebalancing are central to this trip," said Abhijit Roy, CEO, GoldenPi. While there is no single ideal fixed-income portfolio that fits everyone, it's important to consider your individual investment objectives, risk tolerance, and income status.
“Investors should consider their asset allocation, investment goals, risk tolerance, market conditions, individual investment performance, tax ramifications, fees, diversification, and personal circumstances prior to rebalancing," said Abhijit Roy. Investors frequently have long-term financial objectives, including retiring early or paying for their child’s education. For the portfolio to continue moving in the direction of achieving these goals, rebalancing is crucial.
It's significant to remember that a person's risk profile affects how their assets are allocated. As per the GoldenPi CEO, a risk-taker can invest 70% of their portfolio in stocks, whereas a prudent investor would choose to invest only 30%. For individuals who need quick access to their money in the short term and desire flexibility in withdrawing their funds, Abhijit Roy said that they might want to
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