With interest rates so low, and a Fed determined to keep them low for a prolonged period, does it make sense to allocate money to fixed income securities right now? According to Vahan Janjigian, CFA, chief investment officer at Greenwich Wealth Management, the Fed’s policies are “punishing the wrong people in the economy.”
This episode of the Take 15 Series was originally released on 26 September 2012.
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Stephen Horan, CFA, CIPM, is managing director and co-lead of education at CFA Institute. Prior to joining CFA Institute, he was a principal of Alesco Advisors LLC, a financial analyst and forensic economist in private practice, and a professor of finance at St. Bonaventure University. Horan co-authored The New Wealth Management: A Financial Advisor’s Guide to Managing and Investing Client Assets, a how-to guide for financial advisers; edited the volume Private Wealth: Wealth Management in Practice, a practitioner’s guide to wealth management; and has published three editions of the Forbes/CFA Institute Stock Market Course, a comprehensive guide to personal investing and wealth management. He is also the author of dozens of articles in leading peer-reviewed journals and has written for the CFA Program curriculum. Horan is a frequent columnist in Financial Times and an associate editor for the Financial Services Review and serves on the editorial board of the Journal of Wealth Management. He holds a BBA in finance with a minor in mathematics from St. Bonaventure University and a PhD in finance with a minor in economics from the State University of New York at Buffalo. Topical Expertise:Private Wealth Management
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1 thought on “Take 15: Fixed Income in a Prolonged Low-Interest Environment (Video)”
I think the “people are being punished by low rates” meme is not really the case. True, Treasury and Muni yields are depressingly low, but as Mr. Janjigian points, out, there are quite a few viable alternatives available without having to climb too far up the risk ladder. Consider that the American homeowner is saving quite a bit of money each month through mortgage refinancing, yielding sums that would be almost impossible to duplicate through investing alone. This deleveraging of consumer debt is a necessary component of the recovery, and one which will – literally- pay enormous dividends for many years to come.