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Monday, July 21, 2025 at 11:59 PM

Benefits of Fixed-income Investments

Benefits of Fixed-income Investments
Edward Jones, 298 S. Taylor St., Fallon, NV 89406

When many people think about investing, the first thing that comes to mind is the stock market. And that’s not surprising, as the rise and fall of stock prices is constantly in the news. But if you’re going to achieve your financial goals, you may well need to look beyond stocks and include fixed-income investments in your portfolio.

Fixed-income investments offer three important benefits:

  • Income – When you invest in fixed-income vehicles, such as bonds, Treasury securities and certificates of deposit (CDs), you receive regular income in the form of interest payments. And you continue to receive this income until your investment matures or you sell it, no matter what’s happening in the financial markets. Of course, the income you can receive from fixed-income investments will always depend on the interest rates at which these investments were issued. But if you own a mix of long-term and short-term fixed-income investments, you can gain some protection against fluctuating rates. When market rates are low, you can get greater income from your longer-term bonds, which typically — although not always — pay higher rates. And when market rates rise, you can benefit by reinvesting the proceeds from your shorter-term bonds.
  • Diversification – If you were only to own stocks, or stock-based mutual funds, your portfolio would be susceptible to higher risks, especially with market downturns. But you may be able to reduce the impact of market volatility by adding fixed-income investments to your holdings. Bond prices often move in a different direction from stocks, so if stock prices are falling, you might find that the value of your bonds is rising. You can also diversify within the fixed-income portion of your portfolio by owning a mix of corporate and Treasury bonds, as well as CDs, just to name a few.
  • Stability – As mentioned, you will always receive interest payments from your bonds if you hold them until maturity. But if you wanted to sell your bonds before they mature, you could get more, or less, than what you originally paid for them. When market interest rates rise, the price of your current bonds will likely fall, as no one will pay you the full price for them when they get newer ones that pay more — this is what’s known as interest-rate risk. Conversely, when market rates fall, the prices of your current bonds will probably rise. But here’s the key point to remember: Bond prices generally don’t fluctuate as much as stock prices. In other words, bonds are typically less volatile than stocks. Consequently, owning bonds can add diversification to your portfolio. And to maximize the stabilizing effects of bonds, you may want to stick with high-quality bonds rated as “investment grade” by independent bond-rating agencies. 

How much of your portfolio should consist of fixed-income investments? There’s no one right answer for everyone. And over time, your interest in these types of investments may well change — for example, as you near retirement, you may want to consider shifting some of your growth-oriented investments into income-producing ones, though you’ll still need some growth potential to keep up with inflation. In any case, the combination of income, diversification and stability provided by bonds and similar securities should be compelling enough for you to find a place for them in your investment mix.This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.
Edward Jones, Member SIPC.

Submitted by Cynthia McGarrah | Sr. Branch Office Administrator for Hunter Drost


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Comment author: Mike HinzComment text: I knew Sam as a member of our church growing up. He always had a warm smile, a kind word, and a great sense of humor! He will be great missed!Comment publication date: 7/2/25, 11:57 AMComment source: Obituary -- Samuel Bruce WickizerComment author: Mike HinzComment text: Great teacher, great coach, but even a better person!!! Rest in peace Mr. BeachComment publication date: 7/2/25, 11:53 AMComment source: Obituary -- Jack Victor Beach, Jr.Comment author: Mike HinzComment text: I had Mrs Hedges for First Grade at Northside Elementary in 1969. I still, to this day, remember her as a wonderful teacher…one of my favorites!!Comment publication date: 7/2/25, 11:29 AMComment source: Obituary - Nancy Marie Hedges C Comment author: Carl C. HagenComment text: What are MFNs and PBMs ?? ............................ From the editor: This is a very good question and we apologize for not catching that wasn't in there. We reached out to the writer/submitter and got this info back...hope it's helpful. PBM: Pharmacy Benefit Managers are pharmacies that are owned by insurance companies. (CVS is one.) They negotiate with drug makers to get reduced pricing for medications, but they historically have not passed along those savings to patients. https://www.ftc.gov/system/files/ftc_gov/pdf/pharmacy-benefit-managers-staff-report.pdf MFN: Most Favored Nation pricing is a policy that means a country agrees to offer the same trade concessions (like tariffs or price reductions) to all member nations of the World Trade Organization (WTO). When applied to pharmaceuticals, it could disrupt global access, deter innovation, and obscure the deeper systemic issues in American health care. https://petrieflom.law.harvard.edu/2025/05/22/the-global-risks-of-americas-most-favored-nation-drug-pricing-policy/Comment publication date: 6/23/25, 7:47 AMComment source: L E T T E R TO THE EDITOR
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