Most people invest to maximize the returns that they can receive on their hard earned money. Investing in fixed income securities can provide investors with a range of benefits as outlined below.

Income

If you are looking for an investment that provides you with a steady income stream and the repayment of your initial investment on maturity then investing in fixed income products could be suitable for you. The most familiar types of fixed income products are cash deposits and bonds. If you prefer to hold some of your investments in cash, the fixed income markets offer alternatives to improve the returns on your cash holdings.

Capital gains

Some fixed income products, like bonds, also offer investors the opportunity to make capital gains when interest rates fall and the price of the product increases. Capital gains improve the returns that you get from your investment. However, you must remember that there is also the risk that you could make a capital loss and therefore lower the returns from your investment.

Lower risk than equity

As fixed interest products are essentially debt, they tend to be less risky than equity investments because the issuer has a legal obligation to repay the money on maturity. If an issuer became insolvent, holders of its debt securities would rank ahead of shareholders in repayment priority.

Diversification

When investing, it is advisable to diversify your investments to spread your risk. Adding fixed income products to your portfolio enables you to reduce the overall risk of your portfolio. Investors can also use fixed income products to preserve the value of their capital while waiting for new investment opportunities to arise. You can also improve the return on the portion of your portfolio that you maintain in cash.

A wide choice of alternatives to suit your preferences

A wide variety of debt securities are issued and traded influenced by the different requirements of borrowers and investors. For example, it can be influenced by the purpose of the borrowing and the prudential requirements imposed by regulatory bodies. Fixed income products are generally classified according to the risk of the issuer, the interest rate, the maturity structure, ease of trading and price movements (i.e. price volatility). This in turn influences the way that they are priced and traded in the market.

Ease of buying and selling

Buying and selling fixed income securities is a relatively simple process when you use the services of a licensed dealer like RIMsec. We can provide you with the information necessary to make an informed decision to both buy and sell fixed income securities and we will execute the transaction for you. Settling the transaction (i.e. exchanging certificates and money) is also simple with RIMsec's assistance.

These are just some of the good reasons for exploring the opportunities to invest in fixed income products through RIMSec.