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Oct 25, 2021
An investment fund is a financial vehicle that pools money contributed by a group of individuals to invest in different types of assets. There are numerous investment funds and numerous ways to classify them, however they are most often categorised according to the type of asset in which they invest. A bond fund, as the name suggests, is a fund invested primarily in bonds and other debt instruments. This particular type of fund may be a good addition to the portfolio of medium to long-term investors.
Bond funds offer many advantages. They can be a more efficient way of investing in bonds than buying individual securities since it gives...
Interest rates are low and have been for quite some time, so it may be hard to remember a time when you could buy an investment grade bond with a coupon of 8.0 percent, but that was once the reality.
If you are a lucky investor who is holding such a bond, you may have noticed that as...
Every investment has a probability of default – it has quantitative and qualitative components. If you are buying a bond – your first concern is usually quantitative “can this company or Government afford to repay me?”. In the case of a company – is it cash flow positive, is it solvent...
In an earlier article this year, I remarked that the paradox of bond prices rising as interest rates rise could be explained by falling credit spreads. So, today I want to delve a little bit more into the usefulness of credit spreads and their importance to bond investors.
What is a...
Everyone’s journey in life is different. We take different paths to achieving our goals and some paths may be more difficult than others. However, planning and preparation can help us to achieve our goals. A common goal shared among most, if not all people, is that of financial freedom. We...
It is often quoted, “An investors worst enemy is not the market but his or her own emotions”. There are numerous theories which attempt to explain how investors react to regret or overreact when buying or selling their investments. Many times, their reasoning is based on the level of...
A popular investment strategy for an investor seeking a predictable cash flow is bond laddering. Bond laddering is in essence building a portfolio of bonds with staggered maturity dates. For example, the portfolio can consist of bonds maturing in three, five, seven and ten years. You can...
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