Why Traditional Fixed Income Is Failing Investors

For decades, fixed income has been the backbone of a conservative, stable portfolio. High-income professionals rely on municipal bonds, government securities, and corporate debt for predictable cash flow and wealth preservation. These investments feel like safe havens, offering a steady shield against the volatility of equity markets.

But today’s economic reality tells a different story. Traditional fixed income is quietly eroding your real wealth. For investors in high-income professions, ignoring this shift is no longer an option.

The Fixed Income Dilemma

The numbers paint a stark picture. Treasury yields have climbed in recent years, yet they struggle to outpace inflation. In 2024, for instance, inflation averaged 3.2%, while 10-year Treasury yields hovered around 4%, leaving little room for real growth. Corporate bonds and municipal securities follow a similar pattern, offering yields that seem appealing until inflation and taxes chip away at the gains. For high earners in top tax brackets, the impact is even more pronounced.

Simply put, the purchasing power of your fixed-income investments is shrinking. The tools once meant to safeguard your wealth are now undermining it.

What’s the Alternative?

Private credit offers a fresh approach. This is not just a passing fad; it represents a fundamental change. In private credit markets, investors can target annual returns of 10% to 12%, yields that not only keep up with inflation but surpass it. Unlike traditional bonds, these investments often include safeguards, such as agreements that prioritize investor protection and greater visibility into how money is being used.

At Ballard Global, we have consistently seen this happen: well-designed private credit opportunities outperform public fixed income while meeting the income stability needs of high-income investors.

A New Foundation for Wealth Building

This shift is real, not hypothetical. Take Dr. M, a retired physician we worked with last year:

Frustrated by the diminishing returns of his bond and annuity-heavy portfolio, he allocated a portion of his investments to private credit. Almost immediately, he saw steady returns that bolstered his financial confidence without sacrificing the stability he valued.

"Ballard Global took the time to walk me through how my assets could be aligned with their investment programs to support both my near-term and long-term goals. So far, the outcomes have matched what was outlined from the start, and I’m on track with the commitments that matter most to me. Their team is responsive, clear, and genuinely helpful—especially when navigating more complex issues. Knowing I have a trusted partner like Ballard gives me real peace of mind." - Dr. M

Over the past few years, we have watched more accredited investors (those with the income or net worth to access these opportunities) pivot from traditional fixed income to private credit. They are not just chasing higher yields; they are crafting portfolios that preserve capital, maintain purchasing power, and fuel genuine growth.

These investors have rediscovered the essence of a diversified portfolio, one that stands firm against inflation and the unpredictability of public markets.

It’s Time to Rethink Your Strategy

We cannot overlook the slow drain of wealth through traditional fixed income. High-income earners face distinct financial pressures. While their income may be reliable, their future depends on smart investment decisions today.

Private credit is not about replacing all traditional fixed-income options. Instead, it acts as a strong partner, a dependable anchor that ensures your portfolio grows in real terms, not just on a spreadsheet. By weaving private credit into your strategy, you can protect and expand your wealth while staying ahead of inflation and tax challenges.

At Ballard Global, we focus on guiding high-income professionals like you through these changes. Our expertise in private credit investments allows us to provide tailored insights and opportunities that match your goals. If you are ready to explore this path, let’s talk.

Do not settle for shrinking wealth. Dive into private credit and find a smarter way forward.

Disclosure: The testimonial from Dr. M. represents the experience of one client and may not be representative of the experience of others. No compensation was provided in exchange for this testimonial. Past performance is not indicative of future results.