Protecting your rights.

Learn about how to protect your rights as an investor. 


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Charles Schwab Stock Losses

The Charles Schwab Corporation was founded in 1971. Originally, the company was named First Commander Corporation. Two years into its existence, the company changed its name to the one it currently has: the Charles Schwab Corporation. This name came from the founder and principle stockholder of the company at the time, Charles R. Schwab. 


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5 Reasons Investors Should Think Twice About Owning Bond Funds

Kyros Law Offices represents investors that have suffered losses due to broker misconduct. Beyond helping investors recover from investment losses, Kyros Law Offices also tries to warn investors of potential harm before it occurs. One area for potential investment losses involves bond fund investments. Here are five reasons why investors should think twice about owning bond funds:

 

1.     Interest rate risk

2.     Credit risk

3.     Redemption risk

4.     Ongoing management fees

5.     Uncertainty regarding what bonds or debt the fund owns.

 

If you have suffered losses of $100,000 or more in your bond fund investments, please call one of our securities attorneys to discuss your rights. 1-800-934-2921

The Importance of Asset Allocation

Allocating one’s investments into different investment vehicles such as fixed income and cash is vital.  According to many securities industry resources, your asset allocation can have a dramatic impact on an investor’s overall return. 

The value of asset allocation as a risk management strategy was clear during many of the major stock market declines. Portfolios blended with stocks, bonds, and cash fell far less than the losses sustained by stocks alone. 

The failure of a financial advisor to recommend a meaningful allocation to investment grade fixed income leaves investors exposed to risk that could have been significantly reduced without losing significant return. Accordingly, it is a well-known standard in the securities industry that older or retired investors cannot sustain the same volatility in their portfolios as younger investors who have the ability to replace their losses. The primary reason investors who are retired, or nearing retirement, should have less volatility is that they cannot replace losses and do not have the time necessary for their portfolios to rebound from market declines.

There is an old rule of the thumb in the securities industry on how to determine what an investor’s proper allocation to stocks should be. You take the investor’s age and subtract it from 100. For example, a 75 year old investor should have no more than 25% of his portfolio exposed to stock market risk. Approximately 75% of his portfolio should be invested in investment graded fixed income and cash. Simply stated, investment grade fixed income provides investors with downside protection.

It is important for investors to understand that there are major risk differences between investment grade fixed income and other types of investments that purport to be fixed income. Preferred stocks and non-traded REITs expose investors to substantial risk of principal loss. In addition, below investment grade fixed-income (junk bonds) expose investors to substantial risk of loss. Junk bond performance in a down market is often compared to how small cap stocks have performed during similar time periods. Investors should be concerned when a financial advisor represents that preferred stocks, REITs, junk bonds, or junk bonds are safe. In fact, investors in certain preferred stocks, REITs, junk bonds, and junk bond funds can still experience substantial losses even when the overall market improves. The risk of total loss of principal in exchange for a few percentage points of additional return is uncompensated risk to the investor. 

 

Lost money because of your stockbroker?

We will fight to help you get your money back. If you have lost over $100,000 due to stockbroker fraud, contact us to protect your rights. Complete the form on this page or call 1-800-934-2921 for a free no obligation consultation with a lawyer. We work on a contingency basis, so rest assured that there will never be an out of pocket expense to you.