I have not talked much about fixed income part of my portfolio but no plan to fix that. The reason why everyone should have fixed income, is to buffer the losses of stock market in uncertain economic times. Fixed income includes bonds, bank interes rates and other types of investment that you know you get fairly constant rate of return.
Because of young my age i will only have 50% or less of my portfolio in fixed income but when retirement comes more relevant, i will switch most of my money on fixed income.
Currenty i have only one asset in fixed income, a banck interrest rate linked to EURIBOR 12 month(365) currently yielding about 4.7% before tax. But after tax that only does about 3.4%. And that is the reason i will switch most of cash reserve to Seligson AAA money market fund which invest money to short(3 month) bank interest rates. So basically i just have to pay tax when i sell this fund and management costs are 0.18%/a. That fund also does not have surrender charge or buy-in-fee. Other benefit is the diversification to different highest rated finnish banks.
link to seligson
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