Equifax

Finance Blog

Stay financially savvy with the Equifax Advisor.

Sign up for our FREE Monthly Email Newsletter

 

Thank you for signing up for the FREE Equifax monthly newsletter

In addition to keeping in the financial know, you may be interested in checking your credit score and report.

Understand your credit. Help protect your identity.

Equifax Complete™ Premier Plan

  • Know What May Influence Your Credit Score and Be Alerted of Changes
    Credit score monitoring with custom alerts
    Important Disclosure: The Equifax credit score and 3-Bureau credit scores are based on an Equifax credit score model and are not the same scores used by 3rd parties to assess your creditworthiness.¹
  • Help Protect Your Identity
    Automatic fraud alerts encourages lenders to take extra steps to verify your identity²
  • Lock Your Credit
    The ability to lock and unlock your Equifax Credit Report³
Save 75% your first 30 days with the purchase of Equifax Complete™ Premier

$4.95 for the first 30 days, then $19.95 per month thereafter. You may cancel at any time; however, we do not provide partial month refunds.4

¹The credit scores provided under the offers described here use the Equifax Credit Score, which is a proprietary credit model developed by Equifax. The Equifax Credit Score and 3-Bureau scores are each based on the Equifax Credit Score model, but calculated using the information in your Equifax, Experian and TransUnion credit files. The Equifax Credit Score is intended for your own educational use. It is also commercially available to third parties along with numerous other credit scores and models in the marketplace. Please keep in mind third parties are likely to use a different score when evaluating your creditworthiness. Also, third parties will take into consideration items other than your credit score or information found in your credit file, such as your income.

²The Automatic Fraud Alert feature is made available to consumers by Equifax Information Services LLC and fulfilled on its behalf by Equifax Consumer Services LLC.

³Equifax Credit Report Control™ is only available while you have a current subscription to Equifax Complete Premier. Locking your credit file with Equifax Credit Report Control will prevent access to your Equifax credit file by certain third parties, such as credit grantors or other companies and agencies. Credit Report Control will not prevent access to your credit file at any other credit reporting agency, and will not prevent access to your Equifax credit file by companies like Equifax Personal Solutions which provide you with access to your credit report or credit score or monitor your credit file; Federal, state and local government agencies; companies reviewing your application for employment; companies that have a current account or relationship with you, and collection agencies acting on behalf of those whom you owe; for fraud detection and prevention purposes; and companies that wish to make pre-approved offers of credit or insurance to you. To opt out of such pre-approved offers, visit www.optoutprescreen.com/.

4We will require you to provide your payment information when you sign up and we will immediately charge your card $4.95. After that, we will charge the card $19.95 for each month you continue your subscription. You may cancel at any time; however, we do not provide partial month refunds.

Equifax® is a registered trademark and Equifax Complete™ Premier is a trademark of Equifax, Inc. © 2014, Equifax Inc., Atlanta, Georgia. All rights reserved.

Bonds and the Bonds Market: A Basic Primer

Written by Dan Solin on July 20, 2010 in Retirement  |   1 comment

Bonds confuse most investors. The securities industry likes it that way. The more you believe investing is just too complex to figure out on your own, the likelier it is that you will need the services of a “financial consultant.” Going down that road is…

Bonds as part of investment strategyBonds confuse most investors. The securities industry likes it that way.

The more you believe investing is just too complex to figure out on your own, the likelier it is that you will need the services of a “financial consultant.” Going down that road is often the beginning of a frustrating journey (for you-the consultant does just fine).

Fortunately, bonds are very simple to understand. Including them in your portfolio does not require the services of any broker or adviser. Here’s a basic primer on bonds.

Most Portfolios Should Include Bonds

Here’s a good rule of thumb: If there’s any possibility you will need 20 percent or more of your invested funds in twelve years or less, you need to have bonds in your portfolio.

The percentage of bonds is a function of your asset allocation (the division of your portfolio between stocks and bonds). Your asset allocation will affect your long-term returns more than any other decision you make, including market timing and stock picking.

Be sure to get it right. A good place to start is the asset allocation questionnaire on my website, Smartestinvestmentbook.com.

Bonds Play a Critical Role

You may be surprised to learn that the purpose of bonds is not to help you meet current and future income requirements. Bonds diversify your portfolio and reduce overall risk. Your goal is to increase the value of your total portfolio. If you view bonds as a source of income only, you will be tempted to take risks that could prevent you from reaching your investment goals.

These risks include extending the maturity dates of your bonds and compromising on the quality of bonds in your portfolio. Both are bad ideas. Bonds with longer maturities are subject to the risk of changes in interest rates. Bonds with lower credit ratings (and higher interest) have a greater likelihood of default.

Use Bond Index Funds or Bond Mutual Funds

Bond mutual funds (whether tied to an index or managed) have many advantages over individual bonds. The primary advantage with a bond mutual fund is diversification.

Any individual corporate bond has a risk of default, as we have seen lately with Lehman Brothers and General Motors (among many others). The way to deal with this risk is to diversify it away by owning a bond mutual fund, which holds a large portfolio of high-quality bonds.

Bond mutual funds also benefit from an economy of scale. They are professionally managed and have more efficient management of cash flows, better liquidity, and, most important, lower costs.

Finally, you should use only low-cost bond index funds for your portfolio rather than bond mutual funds.

Why? The bond markets are as efficient as the stock markets. Paying a bond fund manager to “beat the markets” has been a poor strategy in the past. For the five-year period ending on December 31, 2009, 84 percent of actively managed bond funds failed to equal their benchmark. This is a pretty dismal record, but it is not surprising. The higher cost of actively managed bond funds puts them at a distinct disadvantage against much-lower-cost bond index funds.

You should consider low-cost and broadly diversified funds like the Vanguard Total Bond Market Index Fund (VBMFX) and iShares Barclays Aggregate Bond Fund (AGG).

Dan Solin is a Senior Vice-President of Index Funds Advisors. He is the author of the New York Times best sellers The Smartest Investment Book You’ll Ever Read and The Smartest 401(k) Book You’ll Ever Read. His latest book is The Smartest Retirement Book You’ll Ever Read.

Follow Dan Solin on Twitter.

Read More:

Five Simple Rules For Protecting Your Retirement Savings

Running Out Of Retirement Money? Make Your Money Outlive You

Creating Your Own Best Retirement Plan

Gold Investment Advice: Should I Be Investing In Gold?

1 comment

  1. freda says:

    This post is full of nice informations about personal finance and bond market are very interesting to read….Thank you for sharing this excellent post….

    ideas


Leave a Comment


Name :


Commenting guidelines

We welcome your interest and participation on this forum, but be aware that comments will be published at Equifax's sole discretion. Please don't use this blog to submit questions or concerns about your Equifax credit report or raise customer service issues. Instead, you should contact Equifax directly for all such matters and any attempts to do so in this forum will be promptly re-directed.

Some other factors to consider when commenting:
  1. Registration and privacy. While no registration is required to visit our forum, participants wishing to post a message must register by creating an account. All personal information provided by forum members incident to registration is governed by our Terms of Use and Privacy Policy.
  2. All comments are anonymous. We'll delete your name, e-mail address, and any other identifying information, including details about your investments.
  3. We can't post or respond to every comment - As much as we'd like to, we can't post every comment, nor can we guarantee that we will respond to each individual message. All questions or comments about your Equifax credit report or similar customer service issues should be handled by contacting Equifax directly.
  4. Don't offer specific legal, tax or financial advice. All of the materials on this Site are for information, education, and noncommercial purposes only and this forum is not intended as a means of expressing views or ideas regarding any specific legal, tax, or investment advice. While offering general rules of thumb is both permitted and encouraged, recommending specific ideas or strategies regarding investments, taxes, and related matters is prohibited.
  5. Credit Repair. This blog is not intended as a venue for the discussion or exchange of ideas regarding credit repair or other strategies intended to assist visitors and community members improve or otherwise modify their credit histories, ratings or scores.
  6. Stay on topic. Your comment should be concise and pertain to the specific post in question.
  7. Be respectful of the community. The use of profanity, offensive language, spam, and personal attacks will not be tolerated and egregious or repeat offenders will be banned from future participation. We encourage disagreement and healthy debate, but please refrain from personal attacks on our WordPresss and contributors.
  8. Finally: Participation in this forum may be terminated by Equifax immediately and without notice for failure to comply with any guidelines or Terms of Use. As such, you should familiarize yourself with all pertinent requirements prior to submitting any response through the blog or otherwise. All opinions expressed in this forum are solely those of the individual submitting the comment, and don't necessarily represent the views of Equifax or its management.

Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.


Retirement Archive