Hi all,
It's my first post so please bear with me. I would like to invest to get some passive income with risk being kept to a minimum. My timeline is 2 years after which I would like to cash out.
I told both banks I want $X income monthly and have been recommended two strategies by two different banks
1) First strategy
a) 50% income & growth fund (allocation is 1/3 high yield bonds, 1/3 convertible bonds, 1/3 equity, the equity is mostly US-based and ~40% in the IT sector) - generates about 9% dividend income
b) 50% USD fixed income income fund (~40% treasuries, ~15% CMOs, ~15% High yield bonds, country allocation ~80% US, Credit quality ~40% AAA, ~20% BB
c) Recommended to put in $400k own money and borrow $600k = ie. $1M investment
2) Second strategy
Invest about $650k of own money into the 1a) fund to get the same amount of income per month
Question: Assuming 1) & 2) gives me the same income per month, which strategy is riskier? Personally I think the 1a) fund is a bit risky. Based on this, even though I have to use leverage in strategy 1), I think it is less risky because the investment is 50% in the fixed income fund. On the other hand, strategy 2) gives me 100% exposure to the 1a) fund.
Much appreciated all.
Submitted August 11, 2018 at 05:45AM by investahnoob https://ift.tt/2M8HAOG
