Investing can be a powerful tool for wealth creation and financial security, but it requires careful consideration and informed decision-making. One crucial aspect of successful investing is understanding asset classes. Asset classes serve as the building blocks of investment portfolios, providing diversification, risk management, and potential returns. In this article, we will explore why knowing about asset classes is essential for investors looking to maximize their investment potential.
Asset classes are broad categories of investments that share similar characteristics and behave in a similar manner within the financial markets. The...
If you own a bond - you are lending money to the issuer. You are mostly concerned about the company’s ability to repay your principal and make your interest payments on time. Your perspective as a bondholder is very different to that of a stockholder. Today we highlight the differences.
Some Stockholders like to see robust dividend payments and share buybacks. This puts more money in the pocket of shareholders. In contrast, higher dividend payouts and stock buybacks are generally less attractive to bondholders, because it means less profits are retained in the company and the buffer between free cash flow and debt repayments becomes lower...
Bonds and Real Estate are two unique investment options allowing you to diversify your portfolio while proving to be a relatively safer investment than stocks, cryptocurrency, and some other assets. Both bonds and real estate are steady investment options with relatively low volatility allowing you to invest worry-free while benefitting from potential capital appreciation and predictable income.
Bonds Investment and Benefits
A bond is a debt investment wherein you (the bondholder) gives a loan to the bond issuer in return for a promise to receive your principal along with interest over a specified time. Bonds can be issued by the...
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...
Apr 03, 2003
Check the credit rating of the issuer of your bond before you buy
Higher risk bonds offer higher yields. These bonds are rated BB+ and below
Lower risk bonds offer lower yields. They are called “investment grade” and are rated “BBB-” and above....
Mar 24, 2003
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.
The face value of the bond can be considered the “principal” value of the loan. It is what the issuer will...
Mar 04, 2003
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...
Feb 19, 2003
HOW RISKY ARE BONDS?
Last week we established that bonds are fixed interest investments that give higher returns than money market investments and individual investors or institutions that are looking for income and modest growth in the medium to long term investments would find them...
Feb 19, 2003
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