Search Query

Fixed Income

Place Trade Financial offers a full service fixed income department to assist you in building your portfolio. Our brokers can locate specific issues or search the market for products that meet your needs. Our objective is to provide our customers with competitive pricing and high yields in the marketplace along with a personalized strategy for making investment decisions based on your objectives, goals, and risk tolerance.

Before you purchase your next bond, why not give us a call? See for yourself why Place Trade Financial is the smart place to trade! Contact a fixed income specialist at 1-800-50-PLACE.

Preferred Stock Offerings

Some Corporations issue preferred as well as common stock. Capital stock which provides a specific dividend that is paid before any dividends are paid to common stock holders, and which takes precedence over common stock in the event of liquidation. Like common stocks, preferred stocks represent partial ownership in a company, although preferred stock shareholders do not enjoy any of the voting rights of common stockholders. Unlike common stock, a preferred stock pays a fixed dividend on a regular schedule that does not fluctuate, although the company does not have to pay this dividend if it lacks the financial ability to do so. The prices tend to be less volatile than the prices of common stock and to move with changing interest rates in the same way that bond prices do. The main benefit to owning preferred stock is that the investor has a greater claim on the company's assets than common stockholders.

If you would like to receive a call when new issues of preferred stock are available for our clients, please call us at 1-800-50-PLACE or send us an email to let us know.

Treasury Inflation-Protected Security (TIPs)

A security which is identical to a treasury bond except that principal and coupon payments are adjusted to eliminate the effects of inflation. TIPS pay a fixed rate of interest, like traditional Treasury Bonds, but their principal, to which the interest rate is applied, is pegged to the current rate of inflation.

Treasuries

These are bonds issued by the US government and are typically in 3 categories:

These issues are considered to be one of the safest investments and carry a special benefit: income earned is exempt from both local and state taxes.

Municipal Bonds

Slightly more risky than treasuries but still considered quite safe, the true benefit of munis is the fact that the federal government cannot tax interest on state and local bonds. In addition, to make municipal bonds more attractive to their own citizens, some local governments will not tax them, allowing for a triple tax exemption -- free from local, state and federal taxation. Although the coupon rate may be lower than taxable equivalent bonds, the ultimate benefits and risks depend upon your tax bracket.

Some tax-free municipal bonds are subject to Alternative Minimum Tax (AMT). When considering an investment of this type, investors who are subject to AMT will want to pay special attention to tax implications, as this tax will reduce their overall anticipated rate of return. Please consult your tax advisor to learn more about your personal situation prior to investing.

Corporate Bonds

Being at the top of the risk continuum, corporate bonds provide the greatest reward and the highest risk. This risk is conveyed to the investor through a ratings system. This rating is determined by two major reporting agencies - Moody's and Standard & Poor's - and is based on the anticipated ability of the company to pay its debts.

Agency/Government Sponsored Enterprise (GSE's)

Bonds in this category, although not a product of the US Government, are issued by government agencies and are subordinate only to direct obligations of the US Treasury, making them quite attractive to investors. These include Collateralized Mortgage Obligations (CMO's), such as the Federal National Mortgage Association (FNMA), and Callable Agency Issues such as the Federal Home Loan Bank System (FHLB). As with any investment that you may be considering, it is crucial that you understand all characteristics of this investment issue.

GSE's are privately held independent organizations that are in part sponsored by the Federal Government. GSE's are considered to be among the most credit worthy investments available today due in part to their implied guarantee by the federal government. While they are not explicitly guaranteed by the government they often have high credit rating and offer attractive yields to investors. GSE's include the following organizations:

For more information on GSE's and other fixed income investments call your Place Trade Financial fixed income specialist at 1-800-50-PLACE or visit Path to Investing.

Collateralized Mortgage Obligations (CMO's)

CMO's are fixed-income investments backed by mortgages or pools of mortgages with different maturity classes. Unlike a conventional mortgage-backed security, which has a single interest date and maturity date, the pool of mortgages in a CMO is divided into four maturity classes known as tranches that are paid off in order, each with a different interest rate and term. A given tranch may receive interest, principal, or a combination of the two, and may include more complex situations.

Mortgaged backed securities are not suitable for all investors. These investments carry risks including call and extension risks, interest rate risk and credit quality risk. These risks may reduce the expected yield on your investment, change the expected maturity date and lead to price volatility. Proceeds of sales made prior to maturity may be more or less than originally invested. As always, investors should consult with their tax and/or legal advisor prior to investing.

Clients should take special care in understanding all of the risks involved prior to investing in Fixed Income products as they are not suitable for all investors. Unless stated otherwise, many fixed income products may be called prior to maturity which may reduce the expected yield if purchased at a premium. Individual securities may be subject to other call features or corporate restrictions that may have effects that are similar to that of a call. In addition, proceeds from the sale of fixed income securities that are sold prior to maturity may be worth more or less than had originally been invested due to price fluctuations, changes in interest rates, market conditions or changes in the credit quality of the issuer of the instrument.