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Is cref bond market good for retirement?
The CREF bond market is designed to assist longer term retirement needs that might include education savings, after-tax annuities, general retirement plans, life insurance, individual retirement accounts and mutual funds. While CREF bonds have experienced over ninety years of positive growth, today's economic trends ask the question is the CREF bond market good for retirement?
Companies that offer CREF bonds usually include a number of services to assist with your investment decisions. These services may include: brokerage services, planning tools and calculators, trust services, meetings and counseling. The special services are designed to help you understand your CREF bond investing while monitoring the changes in the market and making adjustments to the positive.
Many people have viewed CREF bonds as almost risk free. However, CREF bonds do carry their own risks. These risks can include: interest rate risks, foreign investment risks, income volatility risks, prepayment and extension risks, credit risks and illiquid security risks.
An example would be, according to the TIAA-CREF bond return information, CREF bonds remain a solid investment due to the following results: mid-term performance (3-yr return 5.30% vs. 4.66% intermediate-term bond average); long-term performance (5-yr return 4.66% vs. 4.27% intermediate-term bond average); ratio of positive years vs. down years is greater than 2; annual stock turnover rate of 173% vs. intermediate-term bond average of 198.44%' less volatile than its peers as it has a 3-year standard deviation of 3.96 lower than category average of 5.99; has a lower management fee than its intermediate-term bond average (0.50% vs. 0.95%)
While the track record of CREF bonds has made them an excellent investment of the past for long-term retirement portfolio, in the last year, CREF bonds have seen more of a downward turn due to the economy. Still, compared to other types of investments, the return has proven to be greater with a better advantage for retirement planning. The investments of funds are based on at least 80% assets in bonds within its benchmark and portfolio tracking index of Barclays Capital U.S. Aggregate Bond index.
Given the volatility of today's market and the skiddish attitude of investors, CREF bonds have remained as one of the overall best performers for long term portfolio results. Working with a financial consultant in reviewing the investments as well as monitoring monthly, quarterly and annual results will allow the investor to take responsibility and action for any downtrends and maintain the quality of up trends.
Viewing the charts and graphs devoted to a 3 and 5 year trend of the CREF bond market will give you an at-a-glance concept that they have by far performed above average and, in some cases excelled over other forms of investments. Many of the real time investment monitoring resources consistently rate the CREF bond market as low risk.
Due to the general performance of the CREF bond market, they are one of the better forms of investment for long term and retirement directions. A good portfolio balance is the key to success and CREF bonds can offer the better options.
The information supplied in this article is not to be considered as medical advice and is for educational purposes only.
|Bond Investment8 Mar 2010|