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Maximize Total Investment Return
We identify bonds that offer high yields relative to their risk, but we are not just coupon clippers. Rather, we seek to maximize total returns by recommending undervalued bonds that can appreciate in value. Each quarter, we present new corporate bond recommendations during The Bondcast, where we discuss the rationale for each investment and why we believe our recommendations can achieve strong total returns.
View our corporate bond returns page to see how our bond recommendations compare to the world's largest bond funds and ETFs.
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Active Fixed Income Investment Strategy
To maximize total returns, we carefully monitor the prices of our recommended bonds and the financial performance of our bond issuers. We then update our buy/sell/hold recommendations through subscriber emails and quarterly webcasts.
When we believe a bond's future return is not compelling relative to other available bonds, we will typically recommend selling such bonds. We typically do not hold bonds to maturity and do not believe in bond ladders as a fixed income strategy.
Highly Selective Investment Recommendations
The over-diversification provided by large bond funds and ETFs reduces returns and is not needed by many investors.
We are partial to Warren Buffett / Charlie Munger “focus investing,” where we concentrate investments on the best opportunities.
The ability to be selective is one of the biggest advantages of individual corporate bonds vs. bond funds. Our investment analysis identifies a select number of corporate bonds we believe can achieve higher investment returns than the leading bond funds. While large bond funds will own some good bonds, the returns of these good bonds are often diluted by the lower returns of other bonds in the portfolio.
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Unbiased Investment Recommendations
Bondsavvy recommends individual corporate bonds based solely on their merits and our corporate bond research.
This is in contrast to full-service brokers that hold bonds in their own inventory and then sell you their bonds, earning them fees on the bid-ask spread plus any markup or markdown they charge investors. We charge a flat Bondsavvy subscription fee and are not incentivized by the size or frequency of subscriber transactions.
We believe this part of our fixed income strategy has been a big reason why we have achieved higher investment returns than bond funds and ETFs.
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Flexible Investment Holding Period
We typically sell bonds before maturity. Bond prices have ceilings, and any fixed income strategy must be mindful of these to maximize investment returns.
We update our bond recommendations quarterly to determine if/when an earlier corporate bond pick becomes a 'sell'. We present these updates during The Super Bondcast, an exclusive interactive webcast. We also provide recommendation updates via email in between editions of The Super Bondcast.
While there are outliers, our typical holding period for a recommended corporate bond has been two to five years. View our corporate bond returns page to see the holding periods of our past corporate bond recommendations.
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Empower Subscribers to Invest in Bonds Online
Bondsavvy is the leading expert for recommending individual corporate bonds to individual investors. We recommend subscribers invest in bonds online through brokerages such as Fidelity and E*TRADE to take advantage of their wide bond inventories, competitive prices, and low transaction fees.
While online brokerages have enabled individual investors to transact at prices at or near the world's largest bond funds, investors still have to select among the 9,000 individual corporate bonds available on retail brokerages. Corporate bond ratings do not advise on whether a bond is a good investment, so their value is questionable. Bondsavvy is a step up. We take the guesswork out of bond investing by providing thoroughly researched bond recommendations that have beaten the world's largest bond funds and ETFs.
Read our fixed income blog post to learn more about the benefits of investing in bonds online.
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Recommend Bonds That Can Achieve Higher After-Tax Returns Than Muni Bonds
We believe, for US investors, our after-tax corporate bond returns compare favorably to municipal bond investment returns. Given the greater financial transparency provided for corporate bonds vs. municipal bonds, we believe it is easier to identify bonds that can increase in price and achieve strong total returns. Historically, the after-tax returns of our recommended bonds have often benefited from a significant portion of our returns being driven by long-term capital gains, which currently receive favorable US tax treatment compared to interest income.
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100% Focus on Individual Corporate Bonds
Would you trust your podiatrist to give you a root canal? Probably not.
If your financial advisor is not knowledgeable about bond investing, he should not be entrusted with your bond investments. Period. Many advisors put clients into bond funds, but those who do often siphon 40% of the client's return to his brokerage and the fund company through financial advisor fees and bond fund fees.
We spend all our time on individual corporate bonds. Jack of all trades advisors cannot compare to our level of bond investing expertise and the low cost at which we provide it.
