RECENT NEWS
The Economic Times  6 hrs ago  Comment 
Supply of the goods from one unit to another shall be based upon the usual commercial documents, such as, invoice & delivery challan instead of a customs bond.
MarketWatch  7 hrs ago  Comment 
Treasury prices rose for two straight months, leading yields to tumble by the largest amount since February, fueled by worries over the U.K.’s vote to exit the European Union and dovish central banks in the U.S. and abroad.
The Economic Times  10 hrs ago  Comment 
The rupee gained for a third day, rising 0.2 percent to 67.0350 a dollar in Mumbai, according to prices from local banks compiled by Bloomberg.
Clusterstock  10 hrs ago  Comment 
LONDON (Reuters) - Investors pulled more money from global equity funds in the past week while buying bonds and pumping cash into emerging debt, Bank of America Merrill Lynch (BAML) said on Friday. July has seen MSCI's world equity index rise...
Clusterstock  12 hrs ago  Comment 
By Claire Milhench LONDON (Reuters) - Global investors dumped equities in July and raised bond allocations after Britain's vote to leave the European Union and subsequent signs of damage to economic growth prompted a dash toward fixed...
The Hindu Business Line  12 hrs ago  Comment 
The yen jumped on Friday and the biggest rise in Japanese government bond yields in years lifted sovereign borrowing costs around the world, after the Bank of Japan's latest measures to boost growth ...
Reuters  Jul 29  Comment 
Weak U.S. economic growth data knocked down the dollar and yields on U.S. government debt Friday, while Japanese government bond yields rose the most in eight years after investors reacted coolly to the Bank of Japan's latest effort to boost the...
Reuters  Jul 29  Comment 
The yen jumped on Friday and Japanese government bond yields rose the most in eight years, lifting global sovereign borrowing costs, after the Bank of Japan's latest steps to boost growth and inflation fell short of investor expectations.




 
TOP CONTRIBUTORS

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

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki