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guardian.co.uk  12 hrs ago  Comment 
Economists see first default in territory’s history but officials disagree Government fears key fund could run out of liquidity by November Puerto Rico’s government said on Friday it would not make a $58m bond payment due on the weekend...
The Economic Times  Jul 31  Comment 
US investment-grade issuers raised US$132.252bn selling bonds in July, making it the fifth busiest month on record and the third busiest in 2015, according to IFR data.
MarketWatch  Jul 31  Comment 
Treasury yields plummet on Friday, finishing at the lowest level since July 8, after the Labor Department said wages and benefits that U.S. employees received rose a record-low 0.2% in the second quarter.
The Economic Times  Jul 31  Comment 
Fund managers in the latest global survey trimmed overall allocations to US and Canadian fixed income, while increasing exposure to euro zone debt.
Yahoo  Jul 31  Comment 
As traders, market pundits and economists jaw over whether the Federal Reserve this year will lift its benchmark lending rate for the first time in almost a decade, several corners of the U.S. bond market aren't waiting around.
The Hindu Business Line  Jul 31  Comment 
Television chef and author Rukmini Srinivas’s new cookbook, Tiffin tempers our nostalgia for homemade food and the bonds it builds and nourishes
MarketWatch  Jul 31  Comment 
Investors are bracing for Puerto Rico to miss about $58 million in bond payments in coming days.
The Economic Times  Jul 31  Comment 
A Hungarian fixed income trader said government bond yields were steady from Thursday while the front was hovering in tight ranges.
The Times of India  Jul 31  Comment 
Agricultural Development Bank of China, one of China's main policy lenders, and other development banks will issue over 1 trillion yuan ($161 billion) of new bonds in coming years to fund lending for infrastructure projects, three people with...




 
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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.

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A how to on investing in bonds

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