Passive Investment Strategy-Bond portfolio Strategy

Post-90s photo guide: always want to travel around the world when you are old, but is your pension enough to spend?

Statistics show that Heilongjiang became the first province in the country to spend all its pensions in 2016. For the Yueguang clan, it is difficult to have fun every month, and it is really necessary to spit out a mouthful of old blood when it comes to saving money for the aged.

In order to solve this pain point, Niuniu will clarify how to make stable asset allocation through bonds in personal finance.

01 bottom line of income: fighting against inflation

If your primary concern is security, you need to pay attention to whether the issuer of the bond is reliable, whether its credit rating is within the investment grade and, most importantly, whether it outperforms the inflated level.

The prospectus clearly defines the fixed interest rate and expected return on the bond, and if the interest rate is higher than the inflation rate, you can hold the bond until the interest is reaped on the maturity date.

If its interest rate cannot beat the inflation rate, then please accept the question from the soul of Niuniu: what kind of salted fish are the investment products that can't resist inflation? Get rid of it.

02 two investment strategies: ladders and dumbbells

The bond god has summed up two sound investment strategies.

Strategy 1: ladder combination (Laddering)

"the child is in junior high school this year, there are still five years to go before the college entrance examination, he will graduate from college 9-10 years later, and he will fall in love and get married 15 years later. He will have a large amount of cash flow to spend about every five years. "

Congratulations, with the expected expenditure, it has taken the first step in financial management! The purchase of bonds can be allocated as follows:

The ladder strategy means that the amount of bonds of each maturity in the portfolio is basically the same. If you buy one-year, five-year, ten-year and 15-year bonds at one time, the maturity dates correspond to the time points of each large expenditure, so as to ensure urgent money flow and gain returns at the same time.

In addition, the ladder layout can also effectively avoid the market interest rate risk, taking into account the stability and profitability.

Strategy 2: dumbbell combination (Barbell Approach)

Dumbbell strategy means that the bond maturity in the investment portfolio is concentrated on two extreme maturities, and the portfolio has some advantages of both two kinds of investment products by selecting two kinds of investment products with different styles. At the same time, it can avoid the losses caused by some market fluctuations.

Short-term bonds can ensure overall liquidity, long-term bonds can ensure overall profitability, and everyone can determine the proportion of holdings according to their own capital flows and forecasts of market interest rates.

03 duration: a reference for preserving value beyond the concept of time

Duration is the average time to recover all its principal and interest, but in practice, it is not only the concept of time, but also a reference to measure the bond's resistance to interest rate risk.

The master who put forward the concept of duration must be a werewolf, here Niuniu reveals the formula for calculating duration, and friends who are good at math can study it.

To understand simply, the shorter the duration is, the smaller the fluctuation of bond price is, the smaller the risk is; the longer the duration is, the greater the fluctuation of bond price is, the greater the risk is. So if you want to be safety-oriented, try to choose short-dated bonds.

04 diversified configuration: the surprise of the global Nuggets

In recent years, global diversified investment has become a general trend, especially emerging market sovereign debt has received more and more attention.

The bonds of a single country are strongly linked due to the influence of macro policies and economic environment. Many investors invest in multiple markets to reduce the risk factors brought by the single market and make the yield more stable.

But at present, the channels through which ordinary investors can buy global bonds directly are limited, mostly through bond funds. As for what the bond fund is, Niuniu will sell it for the time being.

Conclusion

All of the above belong to the passive investment strategy of preserving value and holding for a long time. However, in the market where interest rates are constantly fluctuating, there is still a need for more proactive investment strategies to avoid risks. You must not miss the next issue if you are curious.