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Pros & Cons of Investing in Bonds
What are Bonds? A bond is a debt security, by which you are lending money to a government, municipality, corporation, federal agency or other entity known as the issuer. In return for investing in the bond, the issuer promises to pay you a specified rate of interest during the life of the bond and to repay the face value of the bond (the principal) when it becomes due. Why Invest in Bonds? It is always prudent for an investor to maintain a diversified investment portfolio consisting of bonds, stocks and cash in varying percentages, depending upon individual circumstances and objectives. Bonds help you to diversify your portfolio, thereby, reducing your risk exposure. Investing in bonds provides a predictable stream of income and repayment of principal. Bonds maturing within three to five years will hold on to the value that they are worth. They offer some protection against stocks related losses in a portfolio. The negative side of investing in bonds: All investment products have drawbacks. Bonds are no exception. Some of the negative aspects of investing in bonds are: Most bonds have a call option. This gives the issuer the right to call back the bonds held by investors generally after five to ten years. When the issuer calls back a bond, it pays your principal back along with the accrued interest and perhaps, a small premium. Issuers adopt this strategy when they can obtain money at interest rates lower than that of the bond in question. When interest rates go up, the price at which the bond can be sold goes down. If you are forced to sell the bond due to pressing circumstances, you may not back the entire amount invested resulting in losses. Long-term bonds can tend to be volatile and can somtimes fail to keep up with inflation. Read More Free Investment, Wealth Creation & Personal Finance Articles & Tutorials at: www.global-investment-institute.com">http://www.global-investment-institute.com The Global Investment Institute has been setup to aid people in the pursuit of a better lifestyle through managing their money effectively, investing wisely and wealth planning for their future.
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The Benefits of Laddering Your CD Investments If you've decided to stock some money away in a certificate of deposit, why not reap the highest benefit over time by laddering your CD investments? What's a CD latter? I'm glad you asked.A CD ladder is made up by purchasing several CD's at one time with different maturity dates. When Its Too Late to Save for Retirement You are 55 years old (or somewhere around there) and your company is going to force you to retire at 65. You have $35,000 saved in your 401K and that's all. Sell Discipline for Investors: Importance and Execution Investors usually don't have an aversion to buying an asset. The real gut wrenching decision is when - and if - to sell. Discipline in Investing and Trading Discipline can be simply defined as your ability to follow your investing and trading plan.Discipline is a rather simple concept. Franchise Investing, Franchise Opportunities and Franchising Renewals Have you considered buying a franchise instead of trying to start a business from scratch. Many franchise agreements are renewed every five or ten years, automatically. The Myth of the Earnings Yield AbstractA very slim minority of firms distribute dividends. This truism has revolutionary implications. Playing With Money - And Making More Ready to start playing with your money? Not interested in complicated businesses or boring bank C.D. The Past Does Not Equal The Future: Mutual Fund Returns! A way that investors get ripped off and in a sense rip themselves off is based on the culture of performance in the mutual fund industry. If you stop and think about it there is absolutely no reason that the past has to equal the future. Day Trading the SP Futures with Initial S/R and the NYSE TICK For instance, if the market moves up in the first 20 minutes of trading, touches the initial resistance zone, and then turns down, this implies that a good tradable downtrend move is likely to develop.How strong that new trend becomes is market-dependent. Trend Following Trend following also called momentum trading is the simplest and safest method of stock market investing. It puts you in stocks and mutual funds that are going up and gets you out when they start down. Shareholders Meeting Changing With Times A significant number of corporations that settled accounts in the past year are ready to hold their annual shareholders meetings.In this year's meetings, more than 300 companies plan as their main focus of attention defense measures against hostile takeover bids. Can Using Sales Leaseback Method of Investment Property Acquisition Reduce Risk? Sales Leaseback compared to traditional property investmentCan a Sales Leaseback arrangement make investing in Orlando investment properties more safe and reliable?Yes. Providing a guaranteed rental amount each month is the safest and most reliable way to realize a return on your investment. Can Your Annuity Do This? Okay, so I can tell you I have sat in front of countless numbers of people who have made mistakes when purchasing and owning annuities. And I have visited people who wish they never got involved in an annuity. Need To Trade! You don't HAVE to be trading.As a novice trader, you'll often feel the need to trade. Dumb Money Many people have, at one time or another, taken some of their hard-earned funds, and decided to put them in the stock market. These well-meaning individuals either acted on a tip they saw on CNBC, or actually believed one of those crazy faxes/emails that said XBXB @ $0. Investing: The Art Of Making Your Money Work For You There is a lot to know about investing. It all depends on what type of investing you are interested in as well. Critical Investors Business Daily Responsibilities - If not Followed Could Cost You Millions! When thinking about the investors business daily responsibilities in today’s market environment, the best remedy for this situation is for you to get more involved in your own investing decisions.The problem is that most individual investors do not have the knowledge, resources, or time to spend doing their own research, stock selection, execution, and position management. Will a Falling Dollar Derail Your Plans for Retirement? How much are you willing to pay for a tank of gas? We've all watched as gas prices hit record highs, but what would you do if you filled your tank and paid by credit card only to discover on your monthly statement that you paid $80 to fill an economy car. No, this is not some future doomsday projection of oil prices. Part II of Day Traders and Swing Traders and Options? Maybe! Before every protective put trade it is possible to calculate your anticipated maximum loss. Use the formula: (stock price minus strike price) plus option price. Chinas Inscrutable Currency Strategy Purpose: Expose Opportunities for Smart InvestorsThe move by China's central bank to drop the yuan's rigid peg to the dollar on the day of my return after a three-week trip to Asia left a host of questions unanswered. The basket of currencies that will allegedly determine the value of the yuan going forward was not disclosed.
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