Both treasury and corporate bonds are the best and safest method of postponing retirement in the long term,”, Investment Communication Director. In his opinion, the condition for success is, among others, adequate diversification of the portfolio. Those who are not afraid of greater risk may decide to use equity funds.
– The most important issue in saving for retirement is just putting money aside. The second issue is making money from the funds we put aside,” says Investor, Director of Investment Communication. – If we consider the creation of a safe portfolio, in this case investors should focus primarily on investing their resources in treasury bond funds or funds with corporate bonds.
Bonds, especially treasury bonds, are a safe instrument, because the state is the guarantor of payment. The purchase of debt securities of companies requires greater prudence in the selection of entities, because here the risk of insolvency is higher, but also higher interest rates can be expected. In recent years, the most beneficial for Treasury bonds and bond funds was 2014, when they reached a double-digit rate of return.
– Looking at historical data, one can assume about 5% rate of return on this type of funds. At the same time, it is important that saving for retirement is carried out systematically,”. – Thanks to this, we are able to balance the rate of return, i.e. buy cheaper when we have a solstice on the debt market and possibly earn more when we have a rally.
According to, 2014 will be difficult to repeat in the current conditions. The yield of American 10-year bonds fell from 4.5% at the beginning of the year to less than 2% at the beginning of 2015. The rates were reduced only once, in October, but by half a percentage point, and the market at the beginning of the year expected rather higher rates. The market was surprised by the deflation that appeared in mid-2014.
– We are dealing with two factors that influence the rate of return on investment we will achieve. The first one is the interest rate movements made by the central bank in the USA,”. – Raising interest rates upwards results in weaker rates of return on the treasury bond market, while lowering those rates increases the rate of return.
The expert points out that bonds are the most profitable when you buy them at high yields, which will then decrease. Lowering your interest rates will help you to reduce your interest rates. Low profitability means high prices and vice versa. Other factors that contribute to investor confidence also influence interest rates, such as when Standard & Poor’s downgraded its US rating in mid-January, profitability jumped up. To date, however, they have almost returned to their pre-decision levels.
– The second factor, important from the point of view of corporate bonds, is the condition of the economy of a given country. At a time when we are dealing with a good, fast development of the economy, the yields on corporate bonds are also quite high – stresses the director of investment communication at Investment Management. In the case of a weaker development of a given country, there is a risk of bankruptcy of specific issuers who let such bonds circulate.
Emphasizes that with the current relatively low interest rates in the USA, the portfolio of Treasury bonds is worth supplementing with corporate bonds. The latest ranking of Online Analyses shows that over the last year (March 2015 – February 2016), US Treasury debt funds lost 0.1%. US corporate debt funds grew by 1.3% in that period. In a 3-year perspective, Treasury bonds are the highest in terms of the aforementioned 2014 year. The profit in this period was 10.6%. The bond funds of companies earned an average of 7.6% in that period.
– Today, taking into account that we are in a cycle of interest rate cuts and they are at a very low level, the yields achieved on the treasury bond market are also relatively low -. – Therefore, for the moment we recommend that in the portfolio of an investor who decides to invest in the debt market some part, e.g. 20-, 30- or even 40%, depending on the risk profile, should be corporate bonds, preferably bought through funds with global diversification, i.e. many issuers of this type of bonds investing in a wide portfolio.
A similar advice is given by the analyst to those investors who are not afraid to take a higher risk and allocate a part of their funds to the purchase of shares.
– We recommend that an investor who is able to take a higher risk should invest in the most diversified portfolio, i.e. in funds investing globally.

Bond funds or global equity funds one of the effective ways to save for retirement
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