3. What is Fixed Income Securities Market?

Fixed Income Definition

Securities which have limited or minimal risk to the principle with the fixed returns paid on the investment. These returns can be classified by quarterly, half-yearly or yearly returns on the principle investment and the capital amount is returned on the maturity with the returns to the fixed income investors. Normally you can expect returns between 6 percent to 10 percent in fixed income funds. Investors with these kinds of investments are mainly classed as “Restricted risk with limited return investors”.

“Fixed income investments are highly suitable for the minimal risk taker investors”. Risk of losing capital is calculated toward inflation rate. For example: If your high yield fix income stocks / bonds assure you for 8 percent returns whereas inflation possibly rises to 9 percent for few years that means you are losing percent per annum when inflation is more than your returns and you are not making money when inflation is equal to your investment returns for those years.

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