Bonds are an integral part of any prudent wealth preservation strategy. At Atlas, we rely heavily on high quality government, corporate and municipal securities as part of our Conservative Risk portfolio management strategy. High quality fixed income investments provide steady streams of income and traditionally exhibit far less price volatility than riskier assets like stocks, commodities and currencies. Once we determine an appropriate fixed income allocation suitable for a particular client, we will consider a variety of factors to construct a diversified bond portfolio. These factors include real interest rate risk, inflation risk, and credit risk as well as duration assessments and tax considerations.

Bond capital markets can be opaque and sometimes difficult to understand. While some securities will trade on an exchange, bond transactions are typically OTC (Over the Counter) trades in which a buyer and a seller operate through an intermediary (whether human or virtual) to transact at a negotiated price. Bid / Ask spreads are much wider than typically found for exchange traded stocks. Fungible sizes are limited to a greater extent than stocks. Unless derivatives are used, it is harder to short bonds than their equity brethren. Fixed income transactions typically have hidden costs within the price while stocks trade with commissions of $0.01 or less per share; bond imbedded transaction costs can rob the ill-equipped investor of precious yield. At Atlas, we have personnel with substantial fixed income market experience and apply this expertise to our client’s bond portfolio management strategy.

As a diversification opportunity for our clients, Atlas Capital Advisors may invest in fixed income products denominated in currencies other than the USD. While possibly achieving a higher nominal yield than would be realized with a USD denominated fixed income product, investments in foreign currency fixed income present the possibility of an additional gain or loss associated with exchange rate fluctuations. The founder of Atlas has substantial experience managing currency risks.