4
votes
3answers
87 views

What's the difference between buying bonds and buying bond funds for the long-term?

I know that if I buy a bond and hold to maturity, I will get the value plus the coupon. If rates go up, the resale value of my bond will go down, and vice versa. However, what happens if I buy into ...
2
votes
2answers
432 views

What do the terms par value, purchase price, call price, call date, and coupon rate mean in the context of bonds?

I am having a hard time understanding municipal bonds. What is the par value vs. purchase price? What is the call date? What is the call price? The coupon rate is just the interest paid out to you ...
2
votes
2answers
192 views

How is investing in a bond fund different than investing in a stock?

You don't have the option to "hold it till maturity", so you are invariably exposed to interest rate risk, and as a consequence, you will probably gain or lose on your principal in the end. Isn't it ...
5
votes
2answers
106 views

How do bond funds have a higher return that the sum of their bond parts?

In looking at bond funds recently, I've seen many that have a return of about 7% annualized over 5 years. However, their holdings are bonds that return 2-5% annualized. How is it possible that the ...