Fixed Income

Fixed income investments play an important role in a diversified portfolio by lowering overall risk, increasing the stability of principal and the dependability of income. To determine the appropriate fixed income strategy we identify your time horizon, risk tolerance, income needs and tax bracket.

Our analysts search for the most advantageous opportunities by carefully monitoring the yield spreads over a wide range of fixed income vehicles. They take into consideration the following factors:

• Prevailing financial market opportunities
  Depending on the prevailing market conditions, we may purchase municipal or corporate bonds, treasuries, foreign bonds, high yield or investment-grade bonds, mortgage-backed securities or other forms of fixed income securities. Individual bonds and/or no-load bond mutual funds are purchased depending on a variety of factors, including: price, asset class, expected holding period, risk, liquidity and marketability.
• Prudent bond management practices
  First Foundation Advisors' experts actively manage the municipal bond portfolios for our clients. We look for the highest quality bonds that meet our standards for safety. These include general obligation bonds, education bonds and utility bonds. We continually monitor the California market and keep our investors informed of new developments.
• Interest rate forecasts
  We manage bonds by forecasting and evaluating changes in market interest rates. This process allows us to make beneficial changes. In a rising interest rate environment, we maintain defensive fixed income positions by shortening maturities and duration. In anticipation of a falling dollar, we may purchase foreign bonds as a hedge against that risk. In a low return environment, we avoid investments that we believe do not offer superior risk/reward characteristics.

Fixed Income Risks and Rewards