Corporate Bond Total Return Investing

BondSavvy identifies corporate bonds that can achieve high total returns that can beat bond funds and ETFs. We do this by recommending bonds that can achieve strong capital appreciation and provide our picks to subscribers at a fraction of the combined cost of traditional financial advisors and bond funds.

Hover over the outside circles to learn our unique approach to corporate bond investing.

We don’t believe in holding bonds to maturity. Bond prices have ceilings, and investors must be mindful of these to maximize returns. We regularly evaluate our recommendations to determine if/when an earlier pick becomes a 'sell'. While there are outliers, our typical holding period for a recommended investment is two to four years. Investment Holding Periods Since our recommendations are focused on achieving capital appreciation, we often find corporate bond investments that can drive higher after-tax returns than municipal bonds. After-Tax Returns 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. We spend all our time on 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. Corporate Bonds Is All We Do Many investors believe interest rates are the ONLY driver of bond prices. Well, we have good news: they are not. While we are mindful of interest rates, many corporate bonds are more sensitive to an issuer's creditworthiness than to rates. Many bond funds can only own investment- grade bonds, which can be highly sensitive to rates. BondSavvy believes in a flexible approach to maximize returns across a variety of investing environments. Interest Rates We believe bond laddering leaves money on the table and should be avoided by investors. If you limit your bond investment selections to only those that mature in specific years, you could be missing out on a great bond that matures in a year without a rung. In addition, if you buy a bond at par and it goes up 25 points, it makes little sense to hold the bond to maturity and only get par back. Limitations of Bond Laddering We are not just coupon clippers. Rather, we seek to maximize total returns by identifying undervalued bonds that can appreciate in value. Our goal is to achieve annualized returns of 7-9% for investment-grade and 10-15% for non- investment-grade (high-yield) corporate bonds. Returns Objectives 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 investors in individual corporate bonds have over index funds. There simply aren't hundreds of bonds worth owning, but hundreds - or thousands - of bonds is what you get in index funds. Focus Investing vs. Indexing
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