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Robert A. Imparato, Jr CFP®
CERTIFIED FINANCIAL PLANNER™ professional
Craig A. Hyldahl CFP®
CERTIFIED FINANCIAL PLANNER™ professional
R.I.C.H. Planning Group, LLC
105 Fieldcrest Avenue, Suite #507
Edison, NJ 08837
Robert: 732-326-5240
Craig: 732-326-5240
Fax: 732-326-5331
Robert: robert@richplanninggroup.com
Craig: craig@richplanninggroup.com
Website: www.richplanninggroup.com
July/August 2024
Understanding Bond Funds
Investors whose goal is to preserve capital may want to consider investing in bond funds,* which offer diversification while minimizing the risk of losing principal. Funds pay regular interest that can provide investors with a predictable income stream during retirement.
What Are Bonds?
Bonds are debt securities. When you buy a bond, you’re lending money to the bond issuer, which can be a corporation, a municipality or the government. In return, the bond issuer pays you interest for the bond’s duration. A bond fund holds securities from many different issuers, providing diversification and reducing the risk of default.Bond Types
Bonds fall into three main categories:Corporate bonds are issued by public and private corporations. Investment grade bonds have a high credit rating and low risk. High-yield (“junk”) bonds are from companies with a lower credit rating and a greater risk of default. Junk bonds pay higher interest to compensate investors for the increased risk.
Municipal bonds are issued by states, cities, counties and other government entities. They’re used to fund projects, such as roads, hospitals and schools, that benefit communities. Interest from municipal bonds generally is exempt from federal — and sometimes state and local — taxes.
Government bonds invest primarily in U.S. debt securities across a broad range of sectors, including Treasuries, government agency bonds and mortgages. Bonds are guaranteed by the U.S. government and present the least risk to investors.
Bond Risks
Bond funds typically don’t carry the risk that comes with investing in individual bonds. If one issuer in the fund defaults, there are many others to dilute the impact. However, investors should be aware that bond funds still have risks that could impact returns. Inflation risk occurs if rising prices reduce the purchasing power of bonds. Interest rate risk occurs when rising interest rates cause existing bond prices to drop.Bond funds can be a good choice for providing retirement income. Your financial professional can offer guidance.
*Investors should read the prospectus and consider the investment objectives, risks, charges, and expenses of the fund before investing. Past performance won’t guarantee future results.
GE-6407076.1 (2/24) (Exp 2/26)
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Duly registered and licensed financial professionals offer securities through Equitable Advisors, LLC (NY, NY 212-314-4600), member FINRA,SIPC (Equitable Financial Advisors in MI & TN), offer investment advisory products and services through Equitable Advisors, LLC, an SEC-registered investment advisor, and offer annuity and insurance products through Equitable Network, LLC (Equitable Network Insurance Agency of Utah, LLC in UT; Equitable Network of Puerto Rico, Inc.). Equal Opportunity Employer - M/F/D/V. Equitable Advisors and its associates and affiliates do not provide tax, accounting, or legal advice or services.
R.I.C.H. Planning Group, LLC is not owned or operated by Equitable Advisors or Equitable Network. GE-6572038.1 (4/24)(Exp. 4/26)
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