Investors are afraid of higher interest rates. There are so many piles of their cash in the money markets and banks. All television and print media gurus have so far been wrong about interest rates. Since the beginning of the year, most people have demanded much higher rates. We are not there yet.
Don’t be afraid to invest in some fixed bonds. If the Prophet somehow understands it correctly and interest rates rise significantly, you will participate in that interest rate trajectory.
We recently invested in fixed bonds issued by Western Alliance Bank.. They are full-service banks covering Nevada, Arizona and California. These Western Alliance Subordinated Debts (CUSIP: 95763PEF4) are rated Baa2 by Moody’s.
The catch is: If the Western Alliance Bank calls the bond on June 1, 2025, the investor will not benefit from the floater component.
Another issue is the minimum amount of $ 100,000 to buy these particular float fixed bonds. But hey, you are a Forbes reader!Just peel off some of those QQQ or Dow Diamond
If you think this requires extra effort, you’re right. This may force you to do business in the old fashioned way — call a broker. There are many brokerage firms that trade fixed-to-float bonds. Not all have a minimum face value.
Insulate your portfolio if the gurus should somehow correct their demands for much higher interest rates. Fixed-to-float bonds can be a valuable addition to your investment strategy.