When you buy bonds, you lend the bond issuer money. In return for this ‘loan,' the bond issuer pays you interest until the bond matures.
There are two main types of bonds you can buy: Corporate bonds and government bonds.
So what's the difference between these types of bonds?
Read on to find out…
What are bonds?
Bonds are known as fixed-income securities. This is because for ... ››› more
When you invest in government bonds, the chances of you not receiving the cash back is relatively low. If governments experience money troubles, they have the option to print more cash or raise taxes.
But with bonds from corporations, it's a different story. Different companies will have different levels of risk associated with whether they can pay back what they owe on bonds or not.
So how ... ››› more
As government bonds are the safest form of bonds, the interest rate they pay out reflects this.
If you want to still invest in lower-risk investments, then corporate bonds are worth looking at.
So what are corporate bonds? And what do you need to know about investing in them?
Read on to find out…
What are corporate bonds?
Corporate bonds work in the same way as government bonds... ››› more
If you look at the bond market, the safest types of bonds you can invest in are government bonds. This is because governments rarely go bust. And if things get tough, governments can always resort to printing more money.
But it's not quite as easy for companies. African Bank bonds are a perfect example of what high risk can do to corporate bonds.
Let's take a closer look at what determines h... ››› more
Corporate bonds are no different from any other type of investment you make. You need to do a bit of research to ensure you're making a sound investment decision. So what sort of checks should you conduct on a corporate bond? And how can you check whether a company can afford to pay back your money? Let's take a closer look…
Corporate bond check #1: The business of the company
Before you ... ››› more
The major reason for investors buying bonds is for the reliable income they provide. To make sure you're buying a bond with a good income, you need to be able to easily compare its performance with other income paying assets. To do this you need to calculate the yield. The yield is the income you get from a bond. So how can you calculate a bond's income yield? And are there any other useful yield ... ››› more
When listed companies, or corporations, decide to sell debt to investors, they use an instrument called a corporate bond. They work in a similar way to government bonds. The company pays you so much in interest every year. Then once the term of the bond is up, pays you back what you paid in the first place. But corporate bonds usually change hands until they mature. So what effects the price? Let'... ››› more
Bonds are a way for governments or companies to borrow money. By investing in bonds, the government or company will pay you interest for holding the bond and at the end of the bond's term, pay you the capital amount. Let's take a closer look at how corporate bonds work and how you can invest in them…
What are corporate bonds and why should you invest in them?
Bonds issued by governments a... ››› more
This is a company name you'll want to remember.
Not because it's an exciting energy science and technology company. And not because it's a way for investors to get in on the renewable energy craze.
This company's name will stick in investors' memories because it's the first ever corporate bond defaulter on Chinese soil.
That's right. Last week the company annou... ››› more
Corporate bonds provide companies a way to borrow money from investors. Companies do this by issuing bonds that can be traded on the stock exchange. But before you can even think about investing in bonds, you need to understand the prices. Read on to find out how the pricing works with corporate bonds...
Before a corporate bond begins trading on the stock exchange for the first time, it usually ... ››› more
Demand for many investments has suffered in the wake of the financial crisis. Investors, wary after suffering two big bear markets in just over a decade, are putting less money into shares. Property continues to fascinate, but sales are down compared to the pre-crisis days. But one asset class has seen interest boom among private investors. We're talking about corporate bonds. Read on to find out ... ››› more
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