The Hindu Business Line  3 hrs ago  Comment 
Jubilant Life Sciences today said its subsidiary Jubilant Pharma has raised $300 million (approx Rs 1,998 crore) through issuance of five-year bonds to mainly retire debts.“Our material wholly-owned ...
The Economic Times  4 hrs ago  Comment 
The benchmark 10-year notes recouped some of the previous day’s losses on Friday, and the rupee advanced, as India moved to contain military tensions.
Reuters  12 hrs ago  Comment 
NEW YORK, Sept 29 (IFR) - Investors piled billions of orders into a US$1.3bn bond from media giant Viacom on Thursday, betting that a possible merger with CBS would help turn around the struggling...  Sep 29  Comment 
WASHINGTON (dpa-AFX) - After seeing early weakness, treasuries turned higher over the course of the trading session on Thursday amid a pullback on Wall Street. Bond prices moved to the upside in afternoon trading and managed to end the...
Forbes  Sep 29  Comment 
Cheap bonds are hard to find in a world dominated by negative short-term interest rates. Record-low yields on long-dated government bonds, corporate bonds priced to perfection and high volatility emerging market debt do not provide much potential...
The Hindu Business Line  Sep 29  Comment 
Public offers of shares and bonds boomed in FY16 as investors returned to primary markets. Click here to read PDF But companies seemed to prefer raising funds through the private placement route...
The Economic Times  Sep 29  Comment 
The rupee fell 48 paise, or 0.72 per cent, to an intra-day low of 66.95 per dollar as overseas investors sold local bonds and equities, show data from CCIL.
MarketWatch  Sep 29  Comment 
Treasury prices rebound from early losses, driving yields lower, as worries surrounding German lender Deutsche Bank weigh on equities, fueling a flight to safety.
The Hindu Business Line  Sep 29  Comment 
RBI will hold 17 bond auctions between October and March


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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