Difference between revisions of "Fixed income"

From Bogleheads
Jump to navigation Jump to search
(Created page with "{{Main|Debt security}} '''Fixed income''' is a term used to describe a type of Financial security that promises to pay fixed sums of cash in the future.<ref name="BM35">B...")
 
Line 9: Line 9:
 
Even finance academics are inconsistent in their use of the term ''fixed income'', but there seems to be consistency in the use of the term ''debt security'' to describe all debt instruments, both short and long term.
 
Even finance academics are inconsistent in their use of the term ''fixed income'', but there seems to be consistency in the use of the term ''debt security'' to describe all debt instruments, both short and long term.
  
Because of the ambiguity of whether or not ''fixed income'' includes money market securities, ''fixed income'' is discussed in the main article, [[Debt security]].
+
Because of the inconsistent usage of the term, specifically the ambiguity as to whether or not ''fixed income'' includes money market securities, ''fixed income'' is discussed in the main article, [[Debt security]].
  
 
==Notes==
 
==Notes==

Revision as of 16:04, 21 April 2012

Fixed income is a term used to describe a type of Financial security that promises to pay fixed sums of cash in the future.[1]

Some Bogleheads consider the main asset allocation decision as the proportions of equities (stocks) and fixed income to hold in the investment portfolio, then further divide fixed income into bonds and cash.

Other Bogleheads don't use the term fixed income at all. Some simply consider the top-level asset allocation decision as the proportions of stocks, bonds and cash to hold. Others simply refer to their top-level asset allocation decision as stocks vs. bonds; cash may be considered as "savings", and not included in the investment portfolio.

Even finance academics are inconsistent in their use of the term fixed income, but there seems to be consistency in the use of the term debt security to describe all debt instruments, both short and long term.

Because of the inconsistent usage of the term, specifically the ambiguity as to whether or not fixed income includes money market securities, fixed income is discussed in the main article, Debt security.

Notes

  1. Bodie, Merton, 2000, p. 35

References