Move Over, Stocks. It’s Time to Make Way for Bonds
When it comes to investing, stocks usually get all the love. They make headlines, drive growth, and can often account for big movement in your portfolio. Bonds, on the other hand … well, what exactly are bonds? Millennials of a certain age might instantly think of a savings bond masquerading as a birthday gift from […]
Buying Treasury Bonds
Treasury bonds — also known as Treasurys or T-Bonds is the umbrella term for different types of bonds issued by the U.S. Treasury. Treasurys come in three main types based on the time frame of the loan: T-Bills — the shortest-term variety maturing in one year or less T-Notes — mid-range loans with maturities of […]
Buying Municipal Bonds
The Strategy Municipal bonds, also known as munis, are issued by states, cities, counties and other government entities below the federal level in order to raise money for public improvements like highways, bridges, schools, hospitals, sewer systems, water treatment plants and other such projects. From a simplistic view, municipal bonds as a whole are investments […]
An Introduction to Bond Investments
Types of bonds There are many different types of bonds available; here’s a brief overview of the more commonly traded ones in the U.S. market. These include debt securities issued by the U.S. Treasury, municipal bonds, corporate bonds and other government bonds. U.S. Treasury debt securities The U.S. Treasury issues debt securities (bonds) in […]
Bond Trading Introduction
As debt securities, bonds can provide excellent diversity to your investment portfolio. They represent money borrowed by a corporation (or government or municipality) to fund expansion, construction, and other growth-related projects. You are the bond investor, who holds an IOU from the borrower indicating you are entitled to recover your money with a specific rate […]
Buying Corporate Bonds
As the name implies, corporate bonds are issued by a corporation. Unlike municipal bonds, they are taxable. If you buy them in a retirement account, they may offer a relatively high rate of return on a tax-deferred basis. Bonds are debt securities rated by independent agencies and, as you’d imagine, higher-rated bonds tend to yield […]
Investing in Bonds: A Beginner’s Guide (Part 1)
Depending on your financial goals, time horizon, and risk tolerance, investing in bonds (debt securities) can play a key role in diversifying your portfolio. What is a bond? When corporations, municipalities, governments, and other entities need funding for their major projects, they raise money by issuing bonds to the general public. Think of a bond […]
Investing in Bonds: A Beginner’s Guide Part 2 – Important Terms
Bond trading involves special terminology and strategy. Here’s a quick overview of the most common terms used by investors. Face value The face (par) value of your bond is the amount the issuer pays you, when your bond reaches maturity. Face value is not necessarily what you paid for the bond, which is known […]
Investing in Bonds: A Beginner’s Guide (Part 3)
Bonds provide a fairly predictable stream of income. They are called fixed-income securities because the amount of money you receive and the dates on which you receive your payments are specified in advance. Fixed-income securities typically have a lower risk factor than stocks. Of course, any investment involves risk. Risks and Rewards of Bond Investing […]
Investing in Bonds: A Beginner’s Guide (Part 4)
When you include bonds in your portfolio, you are adding diversity and offsetting potential risks to your investment. Consider these strategies as you prepare to begin bond trading. Reduce overall investment risk Stocks may go up over time, sometimes with spectacular results. But they can also stagnate, lose value, and, in rare cases, lose their […]
