With so many half-truths, misconceptions and downright falsehoods out there, we'd like to take a moment to dispel these common bond myths.

1. High yield equals junk. While there isn’t a precise or even a consistent definition of "junk bonds", this term is generally used to refer to high-yielding bonds issued by distressed companies of questionable financial standing, with only the promise of the issuer that it will be repaid at maturity. At Sims, we invest in projects – buildings, steel, brick and mortar – that have a high calculated rate of success. In our experience, finding hidden value and picking the right high-yield bond is the difference between a two and a seventy-two year old firm. Because we focus, and are experts on, a unique segment of the market, we can better assess the likelihood of an investment’s success. Another important difference with Sims bonds – our bankers stay involved in our projects from issuance until maturity or refunding. We are not just peddling other people’s paper that the investment banker walks away from after selling it to the investor. After all, our name is on our bonds, and our reputation is very important to us.
2. Non-rated means high risk. All investments have some degree of risk. Just because a bond isn't rated doesn't necessarily mean it is more risky. Depending on the size of the issue, it may not make sense to get a bond rated. Ratings are often a marketing tool for more general, mass marketed bonds.
3. Stocks always outperform bonds. Not only can bonds perform well, at times they have been known to outperform stocks. Just as with equities, there are various levels and subsets of bonds, each with different performance characteristics, offering all kinds of returns. And, statistically speaking, most money managers are not able to beat the indices on a consistent basis. Bonds can always play a strategic role in a portfolio in any market cycle.
4. Bonds offer low liquidity. You can trade bonds. In fact, on average, $11 billion of municipal bonds trade in the secondary market daily. Owning a bond doesn't mean a lifetime commitment.
5. Uninsured bonds are always risky. There are various levels of risk with any investment. As with rating, just because a bond isn't insured doesn't mean it couldn't be. And remember, insurance isn't free.
6. All bonds are created equal. Bonds come in a wide range of formats – so many, in fact, that it can overwhelm the beginner. At Sims, our fixed income experts can help you navigate the vast array of choices in the market to identify the most suitable investment, considering your objectives and goals.
7. You have to be wealthy (or smart) to build a strong bond portfolio. Wealth is relative. In the hands of your personal bond expert at Sims, a $100,000 investment can build a well-structured, diverse portfolio tailored to your specific goals and objectives. As far as brains go, you only need to be smart enough to talk to the experts at Sims.
8. Bonds are old fashioned. The only thing old-fashioned about bonds is building wealth. Fads come and go in markets, but we are committed to building long-term wealth for our clients.
9. Bonds don't need to be managed. Buy a bond and forget about it? Forget about it! As markets shift, opportunities come and go, and it takes an experienced partner to spot – and take advantage of them. Sims believes in actively monitoring our clients' portfolios, which is included in the service we customarily provide.
10. Bonds are for the elderly or those nearing retirement. Pardon us, but since when did age become a prerequisite for making money? Steady incomes and strong, real rates of return are possible with bonds. No matter how old you are.