Candlestick Trading Blog
September 22, 2009
What are Bonds?
| When learning about the different types of investment options available you are sure to come across bonds. What are bonds? Bonds are debt securities that are similar to IOUs. When investing in bonds you lending money to a corporation, the government, municipality, or a federal agency. In exchange for the loan, the issuer of the bonds promises to pay a specific rate of interest during the life span of the bond as well as the face value of the bond once it matures. In today’s article we discuss the different types of bonds that are available for the investor to invest in. What are bonds? Individual bonds – these bonds are mostly bought and sold in the over-the-counter (OTC) market. Some corporate bonds are listed on the New York Stock Exchange. This market has hundreds of securities firms and banks that trade bonds over the phone and via computers. Your investment advisor can help you when buying bonds of this nature. Bond funds – these bonds are similar to stock funds in that they offer professional selection and management of a portfolio of securities. These types of funds provide portfolio diversification as well as many other things. Bond funds also provide the investor with the option of having interest payments either reinvested or distributed at certain times. These funds are actively managed and they do not have a specified maturity date. Open-ended bonds funds actually allow the investor to buy bonds and sell bonds or sell your shares of the fund whenever he or she would like. Bond funds net asset values fluctuate daily so your portfolio will fluctuate as well. What are bonds? Money market funds – these types of funds are pooled investments that are short –term and highly liquid securities. They are highly liquid since most of them allow investors to withdraw their money at any time. They include U.S. Treasuries, certificates of deposit, and municipal bonds. They typically consist of securities and other instruments that have mature in three months or less. Bond unit investment trusts – when bond investing this bond unit investment offers a fixed portfolio of investments in municipal, mortgage, government, or corporate bonds. The investments that are part of the trusts are professionally selected and they are constant throughout the life of the trust. The minimum initial investments for these trusts are typically between one thousand and five thousand dollars. The trust usually ends when the last investment matures. Online Stock Market Reviews presented live via the internet by Stephen Bigalow |
|
 |
|
 |
|
 |
|
 |
------------------------------------------------------------------- -
0 Comments:
Post a Comment
<< Blog Home