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Linde AG: Linde exercises right to call two hybrid bonds early DGAP-News: Linde AG / Key word(s): Bond Linde AG: Linde exercises right to call two hybrid bonds early 31.05.2016 / 11:18 The issuer is solely responsible for the content of this...
Reuters  3 hrs ago  Comment 
The Insurance Regulatory and Development Authority of India (IRDA) is nudging insurers to trade some of its government and corporate debt, instead of holding them to maturity, said V.R. Iyer, a senior IRDA official, on Tuesday.
The Economic Times  6 hrs ago  Comment 
The company had an interest payment obligation of $6.9 million which it failed to pay. The company was also downgraded by Fitch ratings post the default.
The Economic Times  9 hrs ago  Comment 
The dollar's 'Yellen surge' is taking its toll on emerging market currencies as well as bonds. Meanwhile, the bears prepare their next onslaught on China.
Mondo Visione  May 30  Comment 
On the occasion of the holy month of Ramadan, the ASE has decided to change the official working and trading hours during the holy month of Ramadan, the working hours will be from 09:30 to 15:30, as for trading hours it will be as...
The Economic Times  May 30  Comment 
The rupiah matched its weakness in most non-deliverable forwards with Indonesia seen staying highly vulnerable to Fed rate hikes, given foreigners' large bond holdings.
The Economic Times  May 30  Comment 
Sources said a London-based firm has approached the ministry as NHAI needs to raise about Rs 50,000 crore this year from the market to fund projects.  May 27  Comment 
WASHINGTON (dpa-AFX) - Treasuries came under pressure during trading on Friday, giving back some ground after moving notably higher in the previous session. Bond prices moved modestly lower in early trading and saw further downside going into the...


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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