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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...

Key takeaways 

  • 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.  

    ...

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...

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...

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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