Enhanced Income Strategy


When developing the Enhanced Income Strategy, I was trying to take a long term investment view and approximate S&P returns using fixed income.  Income investing (Bonds) is different from asset appreciation investing (Stocks). 

Income investing provides new funds with regularity on a contractual basis.  It provides a reliable and predictable outcome.  Appreciation investing provides funds when an investment is sold and a profit when the investment is sold at a price above the purchase price.  This is a more highly volatile process and selling into a long term downward market can seriously erode the long term value of the portfolio.  When Investment Grade bonds are held to maturity, the day to day mark ups or downs are less relevant.  Additionally, bonds tend to be at the top of a firms capital structure, so in the event of a liquidation; while stockholders may get nothing, bond holders get paid first.

The Enhanced Income Strategy utilizes Investment Grade bonds which have historically de minimus default rates to create high rates of return since 2011.  The strategy provides income and that income may be withdrawn, reinvested or used to balance a portfolio.  

Steve Kaczmarek, Founder & President