Bond funds (or bond mutual funds) are mutual funds that invest in a portfolio of corporate and government bonds. As a general rule, the safest bonds are issued by or guaranteed by the federal government.
Next comes provincial issues or bonds with provincial guarantees. Corporate bonds are far riskier than government bonds, and the risk on corporate bonds, varies widely. Some corporates are almost as safe as government bonds and offer only slightly higher yields. Some corporates are far riskier and offer far higher yields.
However, the major risk factor in the bond market is changing interest rates, which influence the value of existing bonds inversely. When interest rates fall, bond prices rise, and vice versa. The longer the term to maturity on the bond, the bigger the effect of a change in interest rates.
Note that we rarely recommend investing in bond funds among the many mutual fund choices available for investors. The bond market is highly efficient and few bond fund managers can add enough value to offset its management fees. But in addition, investing in a bond fund exposes you to the risk that the manager will gamble in the bond market and lose money. That’s a bigger risk than ever right now.
Today’s interest rates do not bring in much investment income, so managers may try to boost returns by taking on extra risk. Bonds are unlikely to perform well over the next few years, if only because interest rates will likely hold steady or rise. That means the fund would only earn interest income on its bonds; instead of capital gains, its bond holdings could produce capital losses.
Bond funds could have a place in your portfolio if you need stability and stick with short-term bonds. But for the best returns, we at TSI Network recommend investing in stocks using our three-part Successful Investor strategy:
Most investors who successfully build wealth over the long term follow certain investing practices. Find out what they are in our FREE investing guide, The 10 Best Practices of Successful Investors.
The bond market outlook can provide a false sense of security. In fact, it puts investors at risk of capital losses if inflation or interest rates rise.
The bond market outlook had a lot of investor appeal in the turbulent years of the 1930s and 1940s… Read More
Investing in bonds: Bonds are unlikely to perform as well in the next few years as they have in the past, mainly because interest rates will likely hold steady or rise further. (Bond prices and interest rates are inversely linked. When interest rates go up,… Read More
ETFs come in all shapes and sizes and numerous factors can influence their investment risk. One measure—standard deviation—aims to capture the volatility of an ETF’s price fluctuations. That metric is used to indirectly identify the volatility of the stocks that the fund holds.
Standard deviation for… Read More
The Bank of Canada increased interest rates in July 2017 for the first time since 2010. Its key interest rate rose from 0.50% to 0.75%. The bank’s next opportunity to raise rates is in September 2017. Whether it will do so is uncertain.
The Canadian economy… Read More
The Bank of Canada increased interest rates in July 2017 for the first time since 2010. Its key interest rate rose from 0.50% to 0.75%. The bank’s next opportunity to raise rates is in September 2017. Whether it will do so is uncertain.
The Canadian economy… Read More
Are you aware of what goes into managing investment funds—and the fees that go along with it?
It’s important to know the ins and outs of the different styles (and fees) in managing investment funds.
Below we share information on five types of funds that investors find… Read More
These two bond ETFs offer exposure to quality holdings with low-fees, but they’re best left to investors who need stable income and really want to hold bonds.
The Bank of Canada will likely hold interest rates steady for all of 2017. That’s because low prices for… Read More
Don’t use these retirement savings ideas if you want to retire comfortably
To succeed as an investor, you need to get used to the idea that short-term declines come along unpredictably. These declines are common enough that some investors think about them way too much. Far… Read More
The Bank of Canada will likely hold interest rates steady for all of 2017. That’s because low prices for oil should continue to offset government stimulus spending as well as stronger exports due to the weak Canadian dollar. The federal government’s tighter mortgage rules should… Read More
CI Canadian Bond Fund
$ 31,286
CI Canadian Equity
$ 73,406
CI Corporate Bond
$ 37,783
iShares Cdn S&P/TSX60
$ 22,640
iShares MSCI JAPAN ETF
$ 22,640
BCE Inc.
$ 7,592
SPDR S&P China ETF
$ 6,783
WestJet Airlines
$ 12,090
Cash
$ 3,489
TOTAL Investments
$ 217,710
A: We don’t generally recommend that investors hold mutual funds, mostly because of their higher fees.
In particular,… Read More
The Successful Investor Inc. and its affiliate Successful Investor Wealth Management (referred to hereafter as TSI Network) know that you care how information about you is used and shared, and we appreciate your trust that we will do so carefully and sensibly. This notice describes our privacy policy. By visiting websites owned by or associated with TSI Network, you are accepting the practices described in this Privacy Policy.
This privacy policy is applicable to all TSI Network Visitors, Clients, Employees, Suppliers, Web sites, Management, and all other interested parties. Any links to or from our site are not covered by this policy. We encourage you to read the privacy policies of every site that you visit.
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We do not collect or disclose personal information, except when it is provided to us voluntarily by the site/store visitor with their consent.
We store subscriber and password files containing personal information securely. These files are stored in secure areas that are not accessible to the general public. We are always working to ensure the security of your personal information.
We are continuously in the process of improving our sites and services. If any new features or policies require a change to this current policy, we will post a clear notice of this change on pages of our site where the privacy policy appears. The principle behind this privacy policy is to collect information with your knowledge and consent.
What personal information do we collect?
The information we receive from customers helps us personalize and continually improve your online experience at TSI Network. TSI Network may collect personal information online for all legal purposes, which include, but are not limited to:
Information You Give Us: We receive and store any information you enter on our website or give us in any other way through sign-up forms or ordering forms for publications and services. You can choose not to provide certain information, but then you might not be able to take advantage of many of our services and features. We use the information that you provide for such purposes as responding to your requests, customizing your web browsing experience for you, improving our website, and communicating with you.
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We do reserve the right, however, to collect and perform statistical analyses of the internet traffic to our website for our internal use. However, information collected does not allow us to identify any individual, and will not collect any personal information of the visitor. Furthermore, we do not sell, rent or loan to any outside parties the information collected and analyzed.
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Does TSI Network Use the Information It Receives?
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Except as provided herein, TSI Network will not sell or rent personal information about you to unaffiliated third parties.
We may disclose personal information you have provided through our websites, for the above purposes, to persons or companies that we retain to carry out and other activities for which you have registered or in which you have otherwise asked to participate. In particular, we may for these purposes transfer information to any country (including the USA and other countries which may not offer the same level of data protection as Canada). We also will disclose personal information if required by law, including compliance with warrants, subpoenas or other legal processes.
TSI Network requires persons and companies to which it discloses personal information to restrict their use of such information to the purposes for which it has been provided by TSI Network, to adequately protect the information, and not to disclose that information to others. TSI Network cannot be responsible, however, for any damages caused by the failure of unaffiliated third parties to honour their privacy obligations to TSI Network. Similarly, TSI Network is not responsible for the privacy policies and practices of other websites that are linked to our websites.
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TSI Network does everything possible to prevent unauthorized intrusion to its websites and the alteration, acquisition or misuse of personal information by unauthorized persons. Notably passwords submitted by users of our websites are encrypted using encryption mechanisms. However, TSI Network cautions visitors to its websites that no network, including the Internet, is entirely secure. Accordingly, we cannot be responsible for loss, corruption or unauthorized acquisition of personal information provided to our websites, or for any damages resulting from such loss, corruption or unauthorized acquisition.
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The provision of information by you is entirely voluntary and you have the right not to provide information. Subject to applicable law, you may have the right to receive certain information as to whether or not personal information relating to you is held by TSI Network and to obtain a copy of such information that is sought. You may also have the right to require information, where appropriate, to be erased, blocked or made anonymous or to have data updated or corrected. If you do not wish TSI Network to hold information about you or if you wish to have access to information, modify information, or object to any processing of information or if you have questions please contact us.
What Choices Do I Have?
Changes to this Policy
This Policy is the sole authorized statement of TSI Network's practices with respect to the collection of personal information through TSI Network's websites and the subsequent use and disclosure of such information. Any summaries of this Policy generated by third party software or otherwise (for example, in connection with the "Platform for Privacy Preferences" or "P3P") shall have no legal effect, are in no way binding upon TSI Network, shall not be relied upon in substitute for this Policy, and neither supersede nor modify this Policy.
TSI Network may revise this Policy from time to time.
Legal Notices and Disclaimers
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