With higher interest rates a distinct possibility in 2015, you may want to think about whether the bond portion of your portfolio is positioned appropriately given your time horizon and risk tolerance. One factor you might consider is which types of bonds may be most vulnerable to a rate hike.
Some investors forget that a bond’s principal value may fluctuate with market conditions. When interest rates rise, longer-term bonds may feel a greater impact than those with shorter maturities. When interest rates are rising, bond buyers may be reluctant to tie up their money for longer periods if they anticipate higher yields in the future. The longer a bond’s term, the greater the risk that its yield may eventually be superseded by that of newer bonds.
After years of record-low interest rates, at some point this year the Federal Reserve is expected to begin raising its target federal funds interest rate (the rate at which banks lend to one another funds they’ve deposited at the Fed). Because bond prices typically fall when interest rates rise, any rate hike is likely to affect the value of bond investments.
However, higher rates aren’t all bad news. For those who have been diligent about saving and/or have kept a substantial portion of their portfolios in cash alternatives, higher rates could be a boon. For example, higher rates could mean that savings accounts and CDs are likely to do better at providing income than they have in recent years.
Most of us think of life insurance as protection against financial loss should we die prematurely. But if and when we reach retirement and the kids are all self-sufficient, do we still need life insurance? The answer is maybe–or maybe not. Here are some situations where life insurance may make sense for retirees, or those close to retirement.
Benefits at death
Provide for a dependent family member
Sometimes, even in retirement, there are family members who’ll depend on you for financial and/or custodial support. Should you die unexpectedly, life insurance may help provide funds needed to support dependent family members who are physically or mentally challenged.
Income replacement for surviving spouse
Generally, Social Security retirement benefits are paid to both spouses, either based on their individual work records or on the work record of one spouse, with spousal benefits available for the other spouse. At the death of a spouse, his or her benefits end, reducing the total benefits available to the surviving spouse. Life insurance can be used to replace the loss of income for the surviving spouse.
Tradewinds Credit Union of Comstock Park, MI Signs Agreement with Money Concepts Capital Corp. to offer Financial Planning Services
Independent broker-dealer Money Concepts is pleased to announce a new strategic relationship with Tradewinds Credit Union.
(PRWEB) January 29, 2015
Wealth Management and Financial Planning firm Money Concepts signed a new agreement with Tradewinds Credit Union a $17.5 million asset credit union based in Comstock Park, MI.
Mary Sullivan, President & CEO of Tradewinds Credit Union has been serving the West Michigan building trades and community since 1956. “I am excited about our partnership with Money Concepts International Inc. and the financial planning service it will provide for our members. Money Concepts like Tradewinds Credit Union will offer the unique combination of friendly and professional service and attention to our member’s individual financial needs.”
Understanding financial matters can be difficult if you don’t understand the jargon. Becoming familiar with these 10 financial terms may help make things clearer.
1. Time value of money
The time value of money is the concept that money on hand today is worth more than the same amount of money in the future, because the money you have today could be invested to earn interest and increase in value.
Why is it important? Understanding that money today is worth more than the same amount in the future can help you evaluate investments that offer different potential rates of return.
Inflation reflects any overall upward movement in the price of consumer goods and services and is usually associated with the loss of purchasing power over time.
Why is it important? Because inflation generally pushes the cost of goods and services higher, any estimate of how much you’ll need in the future–for example, how much you’ll need to save for retirement–should take into account the potential impact of inflation.