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Investment Advice & Risk

Portfolio Diversification: Fixed Income Investments Can Add Stability to Your Portfolio

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July 28, 2017

Jul 28, 2017

10:44 AM America/Chicago

Balance is as important in your portfolio as it is in riding a bike. For many investors, fixed income investments can help achieve the desired balance by helping reduce portfolio volatility and provide regular income.

Asset allocation is key

Fixed income investments, including bonds, are an important component in reducing investment risk in your portfolio as bond prices and stock prices often move in opposite directions and bonds provide income. How you allocate your portfolio among stocks, bonds and cash will depend on your individual circumstances and financial goals as well as how much risk you are willing to take.

As part of the financial planning process, you’ll want to work with your Financial Advisor to develop an asset allocation plan customized to your needs. As your circumstances change over time, your Financial Advisor can work with you to adjust your asset allocation plan. For example, as you get closer to retirement, it may be important to increase your fixed income allocation to help reduce investment risk.

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