Bonds

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Credit Ratings for Corporate Bonds

An entire industry is devoted to rating companies by their financial strength. The most common ratings come from Moody’s and Standard & Poor’s, but other rating services exist, such as Fitch Ratings, Dominion [more…]

What is Bond Yield-to-Maturity?

Appropriately weighing potential risk and return is what good investing is all about, really. As for the risk and return on corporate bonds, the potential return [more…]

How Do Corporate Bonds Compare to Treasuries?

When it comes to adding stability to a portfolio — the number one reason that bonds belong in your portfolio — Treasuries and investment-grade (high quality) corporate bonds are your two best choices. [more…]

Why Invest in Corporate Bonds?

To put it bluntly, corporate bonds can be something of a pain in the pants, especially when compared to Treasury bonds. Here’s what you need to worry about when investing in corporate bonds: [more…]

What about High-Yield Bonds?

No definitive line exists between investment-grade and high-yield bonds, sometimes known as junk bonds. But generally, if a bond receives a rating less than a Baa from Moody’s or a BBB from Standard & [more…]

Research Interest Rates, Inflation Rates, and the General Economy

A bond, no matter its quality or maturity, tends to rise and fall in value with the general conditions of the markets and of the economy. Prevailing interest rates, the rate of inflation, and supply and [more…]

Three Levels of Research to Measure the Desirability of a Bond

Determining the true value of a bond investment, and how much you’re really going to get out of it in the end, requires three levels of research. You could compare it to buying a home. Shopping for a home [more…]

Get the Basic Information about a Bond

You will want to research bonds before investing your money. Here are the first three things you will want to find out about a bond: [more…]

Research a Bond’s Ratings, Maturity, and Callability

After you have done basic research on a bond and know the face value, coupon rate, and sale price (discount or premium), you are ready to start a little digging. Here’s what you want to know next about [more…]

Savings Bonds as Gifts or Small Investments

Until recently, U.S. savings bonds had been popular as gifts in part because they were sold as nicely designed certificates. On January 1, 2012, however, they became electronic entities, just like other [more…]

Treasury Bills, Notes, and Bonds for Serious Investing

About 99 percent of the approximately $15 trillion in outstanding Treasury debt is made up not of savings bonds but of marketable (tradable) securities known as bills, notes, and bonds. This “bills, notes [more…]

Treasury Inflation-Protected Securities (TIPS)

Like the I bonds, Treasury Inflation-Protected Securities (TIPS), introduced in 1997, receive both interest and a twice-yearly kick up of principal for inflation. As with interest on other Treasury securities [more…]

Figure Out Whether You Want Treasuries

Here are a few reasons Treasury bonds likely belong in your investment portfolio and what kind of returns you can realistically expect from these investments. [more…]

How to Invest in Treasuries

Picking individual treasury bonds has little value and looks a lot like gambling. That’s because the markets for Treasuries are extremely efficient: So many buyers and sellers are involved, and any information [more…]

How To Enter the Treasury Marketplace

Buying a Treasury bill, note, bond, or inflation-protected security is a heck of a lot easier than buying most other bonds. With Treasuries, you needn’t worry about such things as credit rating, callability [more…]

Three Options for Bond Investing

Below are three descriptions of specific types of bonds you might invest in: repos, treasury strips, and savings bonds for education. Umpteen different kinds of debt securities are issued by the U.S. Treasury [more…]

What Are Yield-to-Maturity and Yield-to-Call?

Yield-to-maturity and yield-to-call are two ways of measuring a bond’s yield. Other ways of measuring return are coupon yield, current yield, and the 30-day SEC yield. It’s a good idea to look up and understand [more…]

What Is the Total Return of a Bond Investment?

Ultimately you can’t know the exact total return of any bond investment until after the investment period has come and gone, even though bonds are called [more…]

Know the Volatility of Your Bond Holdings

When investment pros talk of volatility, they are talking about risk. When they talk about risk, they are talking about volatility. Volatility in an investment means that what is worth [more…]

Successes and Failures of Fixed-Income Investing

In the year 1926, if somone had invested $100 in long-term government bonds, their original investment of $100 would now be worth $9,400. It grew at an average annual compound rate of return of 5.5 percent [more…]

The History of Fixed-Income Investing

Bonds have been a bulwark of portfolios throughout much of modern history, but that’s not to say that money — some serious money — hasn’t been lost. Here are examples of some bonds that haven’t fared well [more…]

Ten Most Common Misconceptions about Bonds

A bond selling for 100 and paying 5 percent looks like the clearest, most easy-to-understand investment possible. Yet it is, in reality, a much more complex organism. Read these ten common bond misconceptions [more…]

Ten Mistakes that Most Bond Investors Make

Investing in bonds is easy. Investing well in bonds is hard. Bonds can be more complicated than they appear. It’s easy to get bamboozled, easy to make dumb mistakes. But if you watch out for these ten [more…]

Ten Q & A’s with Bond Guru Dan Fuss

Here are ten questions and answers about bond investing with Dan Fuss, who is vice chairman of Loomis, Sayles & Company. He’s been managing investments for more than half a century. [more…]

What Are the Basic Kinds of Bond Funds?

With hundreds upon hundreds of bond funds to choose from, each representing a different basket of bonds, where do you start? That part is actually easy: You start with the particular class of bonds you [more…]

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