Avoiding the “Highway Toward the Danger Zone” in fixed income investing.

With interest rates finally increasing from historic lows, the traditional way of thinking about fixed income investing has become a potential “highway toward the danger zone” (my apologies to singer Kenny Loggins and his title song to the movie Top Gun circa 1986).

The following discussion emphasizes why investors need to think about fixed income investing dynamically and to structure fixed income portfolio allocations based on desired outcomes vs. traditional style boxes.

In our firm’s view, not doing so increases the likelihood of your fixed-income portfolio “crashing and burning” leaving you without a parachute to safety.