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How To Invest

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How to Calculate the Yield of Your Income Stock Investment

The main thing to look for in choosing income stocks is yield: the percentage rate of return paid on a stock in the form of dividends. Looking at a stock’s dividend yield is the quickest way to find out [more…]

How to Calculate the Payout Ratio of your Stock Investment

The payout ratio is simply a way to figure out what percentage of the company’s earnings are being paid out in the form of dividends. People concerned about the safety of their dividend income should regularly [more…]

Why a Company’s Bond Rating Is Important

A company’s bond rating offers insight into the organization’s financial strength. Bonds get rated for quality for the same reasons that consumer agencies rate products such as cars or toasters — to gauge [more…]

Income Stocks to Consider: Utilities and Real Estate Investment Trusts

Income stocks tend to be in established industries with established cash flows and less emphasis on financing or creating new products and services. When you’re ready to start your search for a great income [more…]

How to Invest in Stock in a Bull Market

Being fully invested in stocks at the beginning of a bull market makes for spectacular success. But doing so takes some courage. Then again, who says you have to get the whole enchilada? You can begin [more…]

How to Invest in Stock in a Bear Market

Sticking to a buy-and-hold strategy (where you buy stock and hold onto it for better or worse) at the onset of a bear market is financial suicide. People have a tough time selling, and financial advisors [more…]

Stock Investing in an Uncertain Market

The end of a bear market doesn’t automatically mean the beginning of a bull market and vice versa. Sometimes markets move sideways or very little either way until investors and participants in the economy [more…]

How to Define a Bond as a Financial Tool

When a government or business — think the United States government, or the city of Philadelphia, or Procter and Gamble — needs to raise money, they may decide to issue a bond. A bond is really not much [more…]

Maturities Define Differences among Short, Intermediate, and Long Bonds

Almost all bonds these days are issued with life spans (maturities) of up to 30 years. These life spans determine whether they are short, intermediate, or long. In the parlance of bond people, any bond [more…]

How Individual Bonds and Bond Funds Compare

Bond investing requires you to decide whether you want to invest in individual bonds or bond funds. Here are some of the pros and cons of owning individual bonds versus bond funds. [more…]

Which Bonds Are Riskier as Investments?

Every year, millions of bonds are issued by thousands of different governments, government agencies, corporations, and municipalities. The following list looks at the degree of risk for each major kind [more…]

What Are Coupon and Current Bond Yield All About?

When you invest in bonds, there are several different types of yield that bond salespeople will talk about, including coupon yield and current yield. It’s important to understand what kind of yield is [more…]

What Are Yield-to-Maturity and Yield-to-Call Bonds All About?

When you invest in bonds, bond salespeople will talk about several types of bond yields, including yield-to-maturity and yield-to-call. Understanding what kind of yield is being promised on a bond or bond [more…]

How to Determine Total Returns from Bonds or Bond Fund Investments

Total return is the entire pot of money you wind up with after an investment period has come and gone. Bonds or bond funds involve your interest and any changes in the value of your original principal. [more…]

“Risk-Free” Investing: U.S. Treasury Bonds

The U.S. Treasury issues lot of different kinds of debt securities. Savings bonds, which can be purchased for small amounts and come in certificate form [more…]

What Are Treasury Bills, Notes, and Bonds All About?

About 98 percent of the approximately $5 trillion in outstanding Treasury debt is made up not of savings bonds but of marketable (tradable) securities known as bills, notes, and bonds. [more…]

What Are Treasury Inflation-Protected Securities All About?

Treasury Inflation-Protected Securities (TIPS) receive both interest and a twice-yearly increase in principal for inflation. As with interest on other Treasury securities, interest on TIPS is free from [more…]

Are Corporate Bonds Worth the Investment?

Corporate bonds may not be worth the investment, especially when compared to Treasury bonds. Here’s what you need to worry about when investing in corporate bonds: [more…]

How a Corporation’s Credit Rating Relates to Risk and Returns

The largest determinant of the risk and return you take on by investing in bonds is the fiscal strength of the company behind the bond. A company’s credit ratings are the measure of that financial muscle [more…]

How Are Callable Bonds Risky?

If you own a callable bond, chances are that it will be called at the worst moment — just as interest rates are falling and the value of your bond is on the rise. At that moment, the company that issued [more…]

Pros and Cons of Convertible Bonds

Some corporate bond issuers sell bonds that can be converted into a fixed number of shares of common stock. With a convertible bond, a lender (bondholder) can become a part owner [more…]

What Are Agency Bonds All About?

As an investment, agency bonds fit under two large umbrellas. Some of them are United States federal agencies; they are an actual part of the government just like Congress. Such official agencies include [more…]

Who Are the Biggest Issuers of Agency Bonds?

The three largest issuers of agency bonds are the Federal National Mortgage Association (known colloquially as Fannie Mae), the Federal Home Loan Mortgage Corporation [more…]

Agency Bonds: The Risks and Returns

All agency bonds are considered high quality with very little risk of default. The honest-and-true federal agencies, such as the Small Business Administration [more…]

The Purpose and Power of Municipal Bonds

If not for the fact that municipal bonds are exempt from federal income tax, they would likely be about as popular as buttermilk at a college keg party. For example, high quality munis with maturities [more…]

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