Investing Buying and Selling BONDS

If you considering Buying and Selling BONDS then you will want to watch this video.

The investment of Buying and Selling BONDS is not for everyone.

 

SOURCE: http://www.investingforme.com/

Why Invest In Bonds? (Part 1 of 7)

Bonds – Their Origins – (Part 2 of 7)

Bond Vocabulary – The Basics (Part 3 of 7)

Bond Vocabulary – Buying & Selling (Part 4 of 7)

Bond Yields (Part 5 of 7)

Bond Features (Part 6 of 7)

Bond Market Pricing ( Part 7 of 7)

Most simply, bonds represent debt obligations – and therefore are a form of borrowing. If a company issues a bond, the money they receive in return is a loan, and must be repaid over time. Just like the mortgage on a home or a credit card payment, the repayment of the loan also entails periodic interest to be paid to the lenders. The buyers of bonds, then, are essentially lenders. For example, if you have ever bought a government savings bond, you became a lender to the federal government. Put differently, bonds are IOUs. Governments (at all levels) and corporations commonly use bonds in order to borrow money. Governments need to fund roads, schools, dams or other infrastructure. The sudden expense of a war may also demand the need to raise funds. Similarly, corporations will often borrow to grow their business, to buy property and equipment, to undertake profitable projects, for research and development or to hire employees. The problem that large organizations run into is that they typically need far more money than the average bank can provide. Bonds provide a solution by allowing many individual investors to assume the role of lender. Indeed, public debt markets let thousands of investors each lend a portion of the capital needed. Moreover, markets allow lenders to sell their bonds to other investors or to buy bonds from other individuals – long after the original issuing organization raised capital. Of course, people wouldn’t lend their hard-earned money for no compensation – there is an opportunity cost involved with any investment, which is the lost opportunity of using those same funds for another purpose. The issuer of a bond must pay the investor something extra for the privilege of using his or her money. This “extra” comes in the form of the interest payments, which are made at a predetermined rate and schedule. The date on which the issuer must repay the amount borrowed (an amount known as the face value) is called the maturity date. The interest rate associated with a bond is often referred to as the bond’s yield or coupon. In the past, when bonds were issued as paper documents, there would be actual coupons that investors would clip and redeem for their interest payments. Read more: Bond Basics: What Are Bonds? https://www.investopedia.com/university/bonds/bonds1.asp#ixzz5NEcwlLoW Follow us: Investopedia on Facebook

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