Meet Dwayne. He's worried about rising interest rates.

  • Dwayne has traditionally depended on bonds to support his retirement portfolio, but with interest rates rising he fears that he will soon be faced with either re-allocating or losing money.

  • Dwayne knows that his bond portfolio is becoming increasingly vulnerable but doesn't know what his alternatives are. He asks his financial advisor about a more efficiently diversified portfolio allocation that would better prepare him for rising interest rates.

  • After assessing his situation completely and discussing his options thoroughly, Dwayne and his advisor discuss how rising interest rates and inflation are indicative of a strengthening economy. They review how certain investments which bear the potential to play an integral role as part of a well balanced, fully diversified durable income producing portfolio, particularly investments in commercial real estate, are building blocks of economic production and how part of their value to investors lies in their utility, which usually grows in periods of rising inflation and interest rates. Moreover, certain commercial real estate sectors such as retail real estate have shorter duration leases, meaning that property owners of retail real estate have the pricing power to offset rising costs through their ability to raise rents more quickly than other sectors. In commercial real estate investment investment structures known as REITs, a minimum of 90% of this growth in rental income is passed on to individual investors.

  • Dwayne became less dependent on bonds to support his retirement portfolio. He now feels comfortable about purchasing that second home in Florida for his family's yearly trip.


Meet others using the Durable Income Approach:

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Shirley

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Andie

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Dwayne

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Steve


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