Bonds - Getting To Know Bonds
The bond market is composed of securities that are in effect loans from investors to borrowers. Borrowers are made up of of companies, states and even our governments. Those that buy bonds are by and large individuals, pension funds and insurance companies.
The coupon, is how the owner of the bond gets paid. And the coupon is for all intents and purposes the interest rate paid to the investor over a specific amount of time. Bonds are also identified as fixed income securities mainly because the interest rate offered is fixed and known to interested parties when the bond is up for sale.
So why are bonds so alluring to some?. Bonds have some advantages over investments such as trading currencies. When you buy a bond you are investing in debt rather than equity (stocks). Debt-holders always get paid before shareholders should a crisis emerge.
The bond market is generally a lot more trustworthy than other markets are. That doesn't mean there are no risks in the bonds market. There are. Rather, bonds offer a cautious investment opportunity. This is because profits are traded off with added security. As such, bonds are often an overlooked investment as a good number people opt for higher risk investments such as forex trading, stocks and commodities.
The United States od America is by far the biggest issuer of bonds in the world. Some 80 trillion US Dollars in bonds we realized in 2008 making the bond market far smaller than either the forex market or the stock exchange market.
Dabbling in the bonds market does have its downside. For one, you often need substantial sums of money to make a decent profit since the interest rates are so low. There may not always be a buyer when you sell the bond. Unlike the currency market, where 90% of orders can be sold in a second. Last but not least, bonds are not traded the way currencies and shares are.
Largely, bonds offer a safe investment opportunity to the Malaysian public and should be part of your investment portfolio. Those of you in Malaysia that are on the conservative side should feel comfortable with the bonds market. The profits yet, are never great unless a big amount is purchased. - 23222
The coupon, is how the owner of the bond gets paid. And the coupon is for all intents and purposes the interest rate paid to the investor over a specific amount of time. Bonds are also identified as fixed income securities mainly because the interest rate offered is fixed and known to interested parties when the bond is up for sale.
So why are bonds so alluring to some?. Bonds have some advantages over investments such as trading currencies. When you buy a bond you are investing in debt rather than equity (stocks). Debt-holders always get paid before shareholders should a crisis emerge.
The bond market is generally a lot more trustworthy than other markets are. That doesn't mean there are no risks in the bonds market. There are. Rather, bonds offer a cautious investment opportunity. This is because profits are traded off with added security. As such, bonds are often an overlooked investment as a good number people opt for higher risk investments such as forex trading, stocks and commodities.
The United States od America is by far the biggest issuer of bonds in the world. Some 80 trillion US Dollars in bonds we realized in 2008 making the bond market far smaller than either the forex market or the stock exchange market.
Dabbling in the bonds market does have its downside. For one, you often need substantial sums of money to make a decent profit since the interest rates are so low. There may not always be a buyer when you sell the bond. Unlike the currency market, where 90% of orders can be sold in a second. Last but not least, bonds are not traded the way currencies and shares are.
Largely, bonds offer a safe investment opportunity to the Malaysian public and should be part of your investment portfolio. Those of you in Malaysia that are on the conservative side should feel comfortable with the bonds market. The profits yet, are never great unless a big amount is purchased. - 23222
About the Author:
Click here for more reading on Bonds and Stock Trading in the links mentioned. The Author has been investing online for over 7 years. When Prema De Silva is not trading stocks, she expands her knowledge on online investing and oversees the operation of a popular online Forex Trading trading website.
posted by X - Men @ 6:30 AM
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