Our most recent Fixed-Income1.com bond portfolio additions and reviews
Presented below is a summary of the 26 bond recommendations that we have made to our clients over the last 12 months, from June 2013 through May 2014. The yields shown below are when these securities were added to our FX1,FX2, and/orFX3 Fixed Income portfolios, and they average 9.81%.
Nineteen of these global corporate debt instruments were Yankee bonds (foreign corporation debt denominated in US dollars), with nine in other currencies, including Canadian dollars, Swedish krona, Brazilian real, and Russian rubles.
Each summary that follows lists the issuer, coupon rate, maturity, credit rating, the yields obtained at the time of acquisition, the portfolio (FX1, FX2, or FX3) each was added to, as well as the business sector and a brief recap of the reason for its selection. Many of the companies hold prominent or even dominant positions within their respective countries. It is not uncommon, however, to find credit ratings that are constrained by a national sovereign credit rating.
- 19 US dollar debt additions, averaging 10.25% yield, were made to FX1.
- 26 mixed currency debt additions, averaging 9.81% yield, were made to FX2.
- 7 foreign currency debt additions, averaging 8.61% yield, were made to FX3.
The bonds in the portfolios have an average outstanding maturity of under 40 months (3 years, 4 months) at an overall indicated average net yield of 9.81%.
Presented below is a summary of the 15 bonds that we have researched, recommended in reviews sent to our clients, and then published on Bond-Yields.com for the last 6 months.
In the last half year, the yields indicated when these securities were initially added to our FX1, FX2, and/or FX3 Fixed Income portfolios have averaged 9.68%. Thirteen of these global corporate debt instruments were Yankee bonds (foreign corporation debt denominated in US dollars), one was in Swedish krona, and one was in Canadian dollars. Each paragraph details the coupon rate, maturity, CUSIP, credit rating, and the yields obtained at the time of acquisition for the FX1, FX2, or FX3 portfolios, as well as giving the business sector and a brief recap of the reason for its selection. Many of the companies hold prominent, dominant, or even monopolistic positioning within their respective countries, and it is not uncommon to find credit ratings that are constrained by a national sovereign credit rating. The following breakdown indicates which portfolio each issue was added to:
14 US dollar notes, averaging 9.9% yield, were added to FX1
The FX1 | Fixed-Income1.com portfolio is a 100% US dollar only portfolio, which is designed for those who simply want or need a higher US dollar income. This FX1 portfolio has worked extremely well inside a 401k or IRA, increasing the cash flow while shielding the income tax from the higher income. To attain the much higher yield we often select and research “Yankee” bonds. These Yankee bonds are usually institutional only bonds that are based in US dollars, but are domain in foreign counties. What the world has not learned yet is that many of the Yankee bonds have better balance sheets, high cash balances, higher profitability, and have stronger strategic / monopoly potions, and less debt than a much higher rated lower yielding similar bond, based in the US. Continue reading
FX1 | Fixed-Income1.com is able to access the much higher yielding global institution bonds. Whether this is because of our outstanding reputation or high internet presence, or because we often have major US and World bond firms contact us wanting our services and business isn’t clear. However it does put us in the enviable position to pick and work with the trading firms we think will provides better price and higher values for our clients. Thus, we are able to shop the globe, often seeing much higher yielding bonds from a wide variety of counties, industries and services that most of our clients can’t find or purchase on their own. Thus we shop the world to find our clients the best bonds. Continue reading
FX1 | Fixed-Income1.com targets an 8 – 8.5% yield with our 3+ average maturity that is far better than the current 0.90% range that the three year government bonds are currently paying. That works out to about an 800% increase of fixed income, by switching to our services.
Based on the above treasury yield, if you have a $1,000,000 portfolio in US government bonds for three years, your yearly income would be $9,000 dollar. Or about $758.33 dollars per month, hardly fitting life style for a millionaire.
Using our midpoint 8.25% yield with a similar maturities using the same $1,000,000 portfolio, the yearly income would be income $82,500. Or $6,875.00 dollars per month. Thus a higher yield can greatly increase your standard of living, in this case over 800%.
It’s simple: You worked hard to earn your money, it’s time your income worked as hard to support you!
FX1 | Fixed-Income1.com portfolio is designed to protect our clients against inflation, with a focus on short term, maturity certain bonds.
Historically, interest rates move in 30 year cycles. Thus interest rates have been falling for about 30 years until the 4th quarter 2012. Not only did interest rates decline for about 30 years, they hit almost zero, an artificially low level. This low level was caused by the Federal Reserve, in a effort to keep short term interest rates at about zero while at the same time pumping large amounts of new money into the system to stimulate the US economy.
We have learned though history that this kind of activity, repeated over a long period of time, could and will have negative long term effects, for example not only helping interest rates to rise, but often creating a similar duration and magnitude opposite swing. Just like a clock pendulum. When you move a clock pendulum to the left many degrees and then let go it will come close to the same movement past center to the right before it begins to find it’s equilibrium, this in finance is this effect is called Regression to the means. So if interest rates are artificiality low with a large pumping of new money, now for over 5 years, at some point this could cause an opposite effect proving a equally overly high interest rates, for about the same 5 year time period. Either way we believe interest rates over the foreseeable future will be rising and the best way to deal with this is the keep your maturities very short and certain, and your bond coupons high.
At FX1 | Fixed-Income1.com we are a fiduciary service firm and very proud of it !
We put our clients interest first. Our service is excellent, and we are honest, hard working blue collar type workers who understand the needs and concerns of our clients. We will explain in writing the risk and rewards. We believe things will be tough, that there will be many economic challenges ahead, and we are working hard on our plans to better position our clients to better evade most if not all of these future issues. We are only paid by our clients and take zero soft dollars, kickbacks, or trading fees. It is important to us to structure our company in a way that is fundamentally right for our clients. This is in our mind just as important is our commitment to provide a fiduciary selection and investment model for our clients.
To take to the next step, the companies we own, vendors that services us, and employees we work with are all work under our fiduciary model. We work hard to run all aspects of our business in a fiduciary role.
We believe ethics is important!
At FX1 | Fixed-Income1.com we recently spoke to a prospective client, he was being charged a 1.5 % fee, to have his money managed, and the advisory/broker had put him in many income mutual funds, each with an additional 1% additional fee.
Thus this prospective clients fees were over 2.5% before the trading and other hidden costs, and these fees were exceeding his returns!!!!! In this very low income environment, this was just plain wrong! The manager and mutual funds were making good returns, while taking no risks, and our future clients was making less money than his fees, causing him to lose money while he was taking all the risk.
To make matters worse this was was for his future retirement.
Our bond fee is 0.50% and in this case only 1/5 or 20% of the total fee of what he was being charged. Our income generation has greatly surpassed what he was getting, and he claims we give him far superior services.
To summarize: The income from his portfolio is over 3 times higher, his fees/costs dropped 80%, and he is making about 8% net off his retirement account instead of losing, plus he is getting better service.
Our fees are almost always below our competitors advisory fees, and we give one to one personal fiduciary services.
The FX2 | Fixed-Income2.com portfolio is designed with low fees to give you a higher return. We are able to keep fees very low with a high degree of service. How do we do this? first we limit our overhead. We have a large internet reach business with one central low cost location / a building in-which we own. We ran from the high rent offices, one in every city model, knowing the clients would eventually would have to pay for this. We aggressively utilize the internet to provide a higher level of transparency, and we are immediately available by Skype. We charge a very low fee and we know of no firms that provide such a high degree of income service that we have provided now for many years.
We are proud to provide a unique and special income service all at a very low fee.
FX1 | Fixed-Income1.com From day 1 this FX1 portfolio is designed to protect and return our clients principle. As with any investment there are no guarantees, however our track records speaks for itself. We have installed a strategy that has worked extremely well in some of the most difficult markets we have ever seen. We all know that economically, the last 5 years have been some of the hardest times american citizens of our generation have ever witnessed, and in other parts of the world its been even worse.
To protect our clients principle we do our own research, first focusing on the companies position, the industry the company is in, and the position of the company inside that industry. We are attracted to monopolies with few if any direct competitors, we shy away from, if not run from commodity type service companies that provide a easy to repeat services and have hundreds if not thousands of direct competitors. It’s a simple strategy. If your a betting man and want to insure your horse will come in first or second place, what do you do? It’s easy! You just make sure there are only two horses running in the race, you chance of surviving if not winning is far higher.
We like companies with few direct competitors, also known as natural monopolies. Companies with few competitors often have higher margins, lower level of debt, and we can find bonds often outside the US with much greater yields in institution sizes. That’s step one. Next we review the balance sheets, cash flow, cash and profitability against their debt levels and payments. Our core focus of this research is to help our clients receive their principle back. Continue reading
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