Clusterstock  1 hr ago  Comment 
By Tom Hals WILMINGTON, Del (Reuters) - Bondholders of gun maker Colt ripped into the bankrupt company's private equity owner in a court hearing on Tuesday, saying the firm sped up its decline by starving it of cash and investment. A Colt lawyer...
The Economic Times  2 hrs ago  Comment 
Wealthy investors spooked by the recent weakness in the stock market are shifting a portion of their money to tax-free bonds.
MarketWatch  3 hrs ago  Comment 
U.S. Treasury yields finish lower for the second straight session Tuesday .  4 hrs ago  Comment 
WASHINGTON (dpa-AFX) - Extending the recovery seen over the past few sessions, treasuries moved moderately higher over the course of the trading day on Tuesday. After seeing initial strength, bond prices pulled back near the unchanged line before...
The Hindu Business Line  6 hrs ago  Comment 
Vodafone has raised ₹7,500 crore through a bond issue. This is first time the telecom operator is raising funds using rupee-denominated bonds. The bond issue has a maturity of five years and a cou...
The Hindu Business Line  7 hrs ago  Comment 
Wall Street Journal  11 hrs ago  Comment 
Jefferies said its profit declined in the latest quarter, hurt by a slowdown in its fixed-income business, while investment banking revenue surged thanks to a pickup in deal activity.
The Economic Times  11 hrs ago  Comment 
IFCs should be allowed to issue tax-free bonds to help them mobilise long-term financing and use the funds for infrastructure development, Assocham said.
Financial Times  Jun 16  Comment 
Peripheral government debt yields rise to pre-QE highs
Mondo Visione  Jun 16  Comment 
Reference is made to the announcement issued jointly by the Issuer and the Guarantor on 11 June 2015 in relation to the full conversion of the Bonds (the “Announcement”) and the application to the Securities and Futures Commission (“SFC”)...
SeekingAlpha  Jun 16  Comment 


A bond is a type of debt. It's a loan from an investor to an institution, and in exchange the investor collects a predetermined interest rate. When a company needs capital to expand its business, it issues bonds to the public. Investors buy them with the understanding that they will collect the original principal plus interest when the bond matures at a set date. Federal, state, and municipal governments issue bonds for a similar purpose, to raise money for projects and public programs.

Types of Bonds

Bonds or Stocks?

Making the choice between stocks and bonds can be complex. In general, though, the key consideration is your own planning horizon.

Bonds are, in general, more predictable than stocks, and (on average and in general) give you lower returns. If you believe you'll need predictable access to money over, say, a 20-year period, you may be better off with bonds. For example, if you want to put aside a specific amount of money for a grandchild, expecting that money to be available for college in eighteen years, and not expecting to have other capital available. Insurance companies invest heavily in bonds for just this reason: it matches predictable liabilities (future insurance claims) against predictable cash flows (principal and interest).

Some bonds have tax advantages; for example, municipal bonds are typically exempt from state taxes in the state that issued them, as well as federal taxes. This can make them more attractive, though often you will find that the market has arbitraged away the difference, and that corporate (that is, taxable) bonds carry a higher gross yield -- and the same net yield after taxes. Although many investors invest in munis for just this reason -- they "don't like the taxman" -- they may not be making the optimum investment choice.

Bonds are not riskless, however. They carry credit risk ("will I get my money back?"), prepayment risk, liquidity risk and interest-rate risk. Many bonds give the bond issuer the right to repay the bond early -- which happens more often when rates are low, in other words, just when you don't want your money back. This is prepayment risk. Liquidity risk is the risk that you won't find a good price for your bond when you want to sell it -- because there are so many more bond issuers than stock issuers, and because bonds are not exchange-traded, there may not be a willing buyer. Interest-rate risk is the opposite of prepayment risk: when rates go up, the value of your bond will drop (it drops more, the further away it is from maturity). If your circumstances change and you need to sell the bond before maturity, you can lose capital that you would otherwise receive, if you held the bond to maturity.

Read More

A how to on investing in bonds

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