Fixed income investments are an integral part of every well-balanced portfolio. They provide safety of principal, regular interest income, and the potential to generate capital gains whenever interest rates move lower. Fixed income investments also help to reduce the overall risk of your investment portfolio. They provide a guaranteed fixed return when held to maturity and are a source of stable cash flow. If you are an active investor who currently owns stocks or equity mutual funds, fixed income investments can add stability to the value of your portfolio because of the guaranteed return they provide.
There is a wide variety of fixed income investments including Government of Canada and Provincial Bonds, Federal Crown Corporation Bonds, corporate bonds, stripped bonds ("strips") and mortgage-backed securities. All are fully marketable and can be sold at market value at any time, should you need access to your funds.
