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Bonds have always been preferred by investors who are looking for predictable income, potential capital appreciation and relative safety. Nowadays, many investors are wary of the current conditions and have been afraid to take on any risk (relative to equities). This is the reason that...

A bond is a debt instrument whereby an entity can raise capital to finance their operations by attracting investors to participate. Simply put it is a loan to the entity (referred to as the issuer) and will have certain contractual features such as principal amount (Face Value), rate of...

Debunking the myths of premiums and discounts: How Bond Prices Work

Over my long 15-year career as an Investment Advisor, I’ve realized that many bond investors are still unaware of how to use bond prices to their advantage. Today we are going back to the basics - specifically as it...

Investing in a low interest rate environment can be very challenging. Investors are actively seeking new types of instruments to place their hard earned life savings.  They will sometimes overlook many obvious risks just for the sake of earning high returns and it turns out that there are...

Bonds – High Yield vs. Investment Grade

Global bonds are a very popular choice of investment for local investors seeking fixed income options and are a good alternative to the stock market. These bonds are primarily issued by governments and corporations as a means of borrowing funds...

So, you are at the point where you are considering the purchase of some bonds. As an investor, one determinant of what you purchase should be the yield you may expect from your investment.

There are basically 3 types of yields that would interest the average investor. These are the...

Callable bonds

This week, the Sterling report aims to introduce another common feature of fixed income instruments – call options. By explaining the way a call option works, the implications and the pros and cons, we hope to improve your ability to evaluate your investment options.

B...

What Are Bonds? 

A bond is an IOU in which you, the investor, agree to loan money to a company or government or other known entity - called the Issuer - in exchange for a specified rate of interest over a fixed period of time.  Its opposite is a stock, which represents ownership in an...

The buying and selling of bonds can be a very simple and straightforward process, but there are a few features that must be understood regarding the calculations.  

Face Value: 

The face value of the bond can be considered the “principal” value of the loan. It is what the issuer will...

WHO INVESTS IN BONDS

Today we are going to look at the following two areas: Who are the people or institutions that usually invest in bonds; (and) What are their reasons for doing so?

First, however, we’ll do a quick recap of some of the basic facts about bonds. A bond is a form of I...

Important Resources

Understanding Bonds

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Biggest Investing Mistakes Right Now

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How Mutual Funds Work

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