I. Key Principles and Decisions on Which This Portfolio Is Based:
- Create a "buy and hold" portfolio that does not require frequent attention.
- Create income exclusively, avoiding a reliance on capital appreciation for any portion of the return.
- Focus on avoidance of capital impairment through interest rate-maturity-duration risk.
- Accept that Decision 3 leaves a choice between accepting default risk or lower return, balancing those elements carefully
- Use as a design basis the premise, even as, we are near interest rate lows, that we have moved past the low points of interest rates across the duration