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Comparing Equity and Fixed Income Trade Settlements

Posted by The Dopkins Wealth Team

Apr 1, 2016 6:00:00 AM

Many investors have not thought much about how stock, mutual fund and bond transactions actually settle. In most situations, the securities move in or out of a client’s account electronically. Most securities settle in one to three days after the trade date (commonly referred to as T+1 or T+3). Settlement simply means the securities are delivered in or out of the account on the established date.

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Topics: fixed income, trade settlements, shadow post



An Individual Bond Ladder Versus a Bond Fund

Posted by The Dopkins Wealth Team

Mar 15, 2016 8:00:00 PM

Many investors are worried about how rising interest rates will affect their fixed income portfolio. Many believe an individual bond ladder better protects them against rising rates because they can see each bond mature. This is a common misnomer. An environment of rising rates will have a similar effect on the value of an individual bond ladder as it will with a bond fund of similar duration and credit quality. Interest rate risk is measured by duration, which measures the sensitivity of a bond’s price to a change in interest rates. For example, a portfolio with a four-year duration will lose 4 percent of its value if interest rates increase by 1 percent (or vice versa).

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Topics: fixed income, bonds; fixed income, bond fund, bond ladder, individual bond ladder



How Dopkins Wealth's fixed income offering is different

Posted by The Dopkins Wealth Team

Jan 26, 2016 8:00:00 PM

Dopkins Wealth Management is a member of the BAM Alliance, a community of more than 140 independent wealth management firms located throughout the United States — united in belief and in practice that there is a better, more effective, and more resilient way for investors and their families to safeguard their financial futures and realize their dreams.  Our clients benefit in many ways through this alliance, including many fixed income advantages. The following outlines some of these benefits to fixed income investors.  

Dopkins, through the BAM Alliance, works with BAM’s Fixed Income department, a team of dedicated fixed income advisors who help provide customized investment solutions for Dopkins’ clients. BAM’s Fixed Income Desk evaluates new assets and portfolios, constructs bond ladders and monitors bond positions for credit quality changes. The desk manages more than $8 billion in bonds and bond funds and trades $2 billion in market value a year. We want to share some key differentiators between Dopkins and BAM’s Fixed Income offering compared with the traditional broker-dealer model.

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Topics: fixed income, bonds, municipal bonds, registered investment advisor, ria, investment advisors act



The Federal Reserve and Rising Rates

Posted by The Dopkins Wealth Team

Dec 14, 2015 11:48:00 AM

With the recent spate of positive economic news, highlighted by the strong jobs numbers for both October and November, all signs point toward the Federal Reserve raising the federal funds target rate 25 basis points from 0–0.25 percent to 0.25–0.50 percent. Based on federal funds futures, the market is assigning a roughly 76 percent probability of a federal funds increase. Given that this would be the first interest rate hike by the Federal Reserve since 2006, many clients are beginning to ask, “Should we stay short and wait for the Fed to raise interest rates before investing?” 

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Topics: wealth management, fixed income, Federal Open Market Committee, Federal Open Market Committee, (FOMC), the fed, treasury bond, fixed income ladder



5 Ways We Evaluate Muni Bonds

Posted by The Dopkins Wealth Team

Nov 19, 2015 3:51:06 PM

While there have been few defaults in the municipal market, it’s important to note that not all muni bonds are created equal. The market offers many different types of bonds backed by varying legal pledges and revenue sources to repay the debt. The following are some of the qualifications it takes for a muni offering to meet our strict parameters to be considered for purchase.

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Topics: fixed income, bonds, muni bonds, municpal bonds



What is fixed income duration and why is it important?

Posted by The Dopkins Wealth Team

Jun 16, 2015 12:05:40 PM

Fixed income investors know there is an inverse relationship between interest rates and the price of fixed-income securities. When interest rates rise, prices fall. When rates decline, prices increase. There are a number of risk measures available to give investors a feel for how a specific bond or portfolio of bonds may change in value given a change in interest rates. The best way, though, to measure price sensitivity is to use duration, of which there are multiple types.

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Topics: fixed income, fixed income duration, modified duration, effective duration, interest rates



A bond’s coupon rate vs. yield to maturity— know the difference?

Posted by The Dopkins Wealth Team

Jun 8, 2015 2:00:00 PM

The coupon rate tells you the annual amount of interest paid by a fixed income security. For example, a Treasury bond with a coupon rate of 5 percent will pay you $50 per year per $1,000 of face value of the bond. The coupon rate, however, tells you very little about the yield. For most securities, the yield is a good proxy for the return of the fixed income security (that is, how much you can expect your wealth to increase if you purchase the security) and is far more meaningful than the coupon rate. To illustrate, consider these two Treasury bonds:

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Topics: fixed income, bonds, dwm, bonds; fixed income, securities



Risks Associated with Fixed Income Investing

Posted by The Dopkins Wealth Team

Mar 27, 2015 11:33:00 AM

Q: What are the risks associated with fixed income investing?

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Topics: fixed income, investing,, reinvestment risk, liquidity risk, inflation risk, interest risk



What are TIPS and how do they work?

Posted by The Dopkins Wealth Team

Nov 14, 2014 12:03:36 PM

Similar to nominal (non-inflation-adjusted) U.S. Treasury fixed income investments, TIPS (Treasury Inflation Protected Securities) are issued with fixed coupon rates and fixed maturity dates (such as five, 10 or 20 years). The key difference between TIPS and nominal bonds is that the coupon rate for TIPS is a guaranteed “real” (inflation-adjusted) return. The principal is adjusted for inflation before the interest payment is calculated. With TIPS, the coupon payments and face value will maintain purchasing power until maturity.

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Topics: fixed income, bonds, bonds; fixed income



Callable Bonds: What are they and what are their risks and returns?

Posted by The Dopkins Wealth Team

Oct 30, 2014 12:37:09 PM

Q: What are callable bonds? And what are the risk and return of callable bonds?

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Topics: fixed income, bonds, municipal bonds, muni bonds, investing in bonds, investment strategy





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