Use this tag for questions that relate to debt instruments known as bonds. Generally, money is lent to governments or corporations that is paid back with interest.
6
votes
1answer
93 views
Why did one-year notes pay more than 10-year notes during the 1980's crisis?
Why did one-year notes pay more than 10-year notes during the 1980's crisis? During the early 1980's, one-year T notes paid more than the 10-year T note, which implies that nobody wanted to buy the ...
3
votes
1answer
27 views
U.S. Bonds Taxed Interest and Current Value
Series EE Bond just matured and I cashed it in.
The current value that I received in cash was only a little more than the original face value.
However, the interest I am paying taxes on is half the ...
2
votes
1answer
41 views
How can I estimate the sensitivity of a bond ETF's price to interest rate changes?
Is there a standard method for estimating the sensitivity of a bond ETF's price to interest rate changes? Some of the information I have includes the average duration and the SEC yield.
7
votes
0answers
104 views
Yield of a municipal bond with a sinking fund?
How do I calculate my expected return if I buy a municipal bond at a premium with a sinking fund feature?
For example, I'm looking at a bond with a coupon of 5.5%, maturing July 2015, with the ...
6
votes
1answer
109 views
How much in inflation protected securities (TIPS) should I buy?
I'm wondering whether it's worthwhile to allocate some of my bond portfolio in the Vanguard TIPS fund. I plan to work until about 2040, and I prefer (efficient) risk over return. I plan to buy and ...
-2
votes
2answers
154 views
What is the compound annual growth rate of the major markets?
What historical compound annual growth rates (CAGRs) have the major markets provided? Data as far back as has been recorded is preferable. Specifically I'm looking for returns of:
Short-term, ...
1
vote
2answers
95 views
Is there a fool-proof way to keep up with inflation? [duplicate]
I know I can keep cash in an interest-based bank account, but that type of investment will not keep up with inflation, it seems.
Would I be right to assume that government/corporate bonds can keep up ...
1
vote
1answer
46 views
How to find out if a company has purchased government (or other) bonds?
Looking at a company's income statement, balance sheet, and cash flow, is it possible to find out if a company has given out a loan to a government or to another business, i.e. government/corporate ...
2
votes
2answers
40 views
International bonds, currency differences, and effect of inflation on such bonds?
Country X's national government purchases country Y's government-issued bonds. Would the bonds be issued in country Y's currency?
How does inflation (of either country's currency) factor into this, ...
1
vote
0answers
23 views
Free source of corporate bond data?
Are there any free sources of corporate bond data?
More specifically, I would like information about new/upcoming issues (but if something like this exists for secondary markets I would be interested ...
2
votes
0answers
55 views
Most cost-effective way to purchase individual bonds?
I am trying to determine the most cost effective way to go about purchasing individual corporate and municipal bonds that I intend to hold until maturity.
Is there great variation in the fees and ...
2
votes
2answers
169 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 ...
7
votes
1answer
142 views
Investments: Feds buying more treasury bonds? How does it affect Bonds (going up or down)?
I have set up a 401(k) and I have bonds.
When the Federal Reserve buys more treasuries (today's news) what's the effect on bonds?
Should I sell my bonds or buy more?
1
vote
1answer
31 views
Taxation of muni bond bought at a premium
Interest received from municipal bonds is generally tax-exempt at the federal level (and at state level if purchaser resides in the issuer states).
Conversely, does this mean that a purchaser cannot ...
3
votes
2answers
212 views
Does Hurricane Sandy or other natural disasters make it a good time to buy US Muni Bonds?
With all of the destruction of property and the repairs that will need to be done in the coming months. Is shortly after a large natural disaster a good time to buy a Muni bond ETF of some sort?
5
votes
2answers
754 views
Effect of a “Bond Bubble” Bursting?
Lately I've heard increasing talk that the next big bubble that will burst in the US is the "Bond Bubble". Consider this recent Wall Street Journal article. Excerpt:
But in the same investment ...
5
votes
2answers
94 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 ...
2
votes
1answer
139 views
Buying Large Amounts of Inflation-Protected Treasuries (TIPS)
We are selling our current property, and will be renting in the short term while looking for a property to purchase. We have some equity in the current property, so will get a payout at closing. To ...
0
votes
2answers
101 views
In a bond, what is the current yield?
What is a current yield and does it matter if you're holding a bond until maturity?
3
votes
1answer
326 views
Can someone explain how government bonds work?
Can someone explain, for irresponsible investors, the maths behind government bonds as presented here?
I am assuming that the "coupon" is the yearly interest paid on the original price. Since this ...
3
votes
1answer
79 views
Why is the Macaulay Duration recalculated after each coupon payment?
I'm trying to understand why Macaulay Duration is recalculated after each coupon payment. I can see why I want to know the duration when purchasing a bond - to figure out how long till I recoup my ...
2
votes
1answer
69 views
Comparing Treasury Inlation Protected Securities (TIPS) vs Certificates of Deposit
I was wondering what the pros and cons are of choosing one versus the other. There are TIPS that seem to have a better yield than CDs and would therefore make for better places to park savings.
2
votes
3answers
210 views
Can zero-coupon bonds go down in price?
If you buy Zero Coupon Bond (Tax Exempt), can it go down in price?
For example: This bond is costing 18 USD now and it will give back 100 at maturity, can it cost 17 tomorrow?
2
votes
1answer
47 views
Long term bond index prices before 2000?
When comparing TLT (Barclays 20 year bond index) with the S&P 500 (e.g. VFINX) it looks too good to be true - almost perfect negative correlation. When the stock market crashes, TLT skyrockets in ...
0
votes
1answer
95 views
Calculating composite rate from fixed rate and inflation rate for I-bonds
For I-bonds:
Composite rate = [Fixed rate + (2 x Semiannual inflation rate) +
(Fixed rate x Semiannual inflation rate)]
I wonder how to understand the above way of calculating the composite ...
2
votes
1answer
87 views
Using stable short-term, tax-free municipal bond funds to beat the bank?
I was lately been looking into some investment strategies, and I thought that short-term, all-single state municipal bond funds (which are free from both state and federal taxes), might be a good way ...
4
votes
6answers
306 views
Should I move my money market funds into bonds?
My money market account interest rate is down to 0.70%. I checked Bankrate and it looks like the most I could get in another money market account is 0.91% which is abysmal. I would like to put the ...
2
votes
6answers
276 views
Investement for beginners in the United Kingdom
Apologies if this question has been asked elsewhere. I live in the UK and earn a decent salary. I have never invested in shares or stocks, or bought a government bond. But I have recently started ...
3
votes
2answers
156 views
How to analyze risk of a bond?
If given the screen below as an example, how would you analyze the risk of a bond? I am not sure what to look for to know if this is a good investment.
What risk factors should be considered when ...
2
votes
1answer
152 views
Short-selling treasuries instead of borrowing on margin?
Let's say I have a diversified investment portfolio, and I wish to tap a relatively small amount of cash (less than 5% of the portfolio's value) without liquidating any of my positions.
I could ...
1
vote
3answers
219 views
Holding bonds through maturity--pros and cons
I'm considering looking into buying bonds, and it seems there are two approaches one can take:
Buying the bond and holding it until maturity. Here you get the interest (coupon) as agreed upon when ...
12
votes
5answers
234 views
Why would a company with a bad balance sheet be paying dividends?
As an example, Ford Motors recently reinstated its dividend. It still has a lot of debt and a high debt-equity ratio. Its bonds are still rated as junk. Why would a company like this spend its cash ...
6
votes
2answers
277 views
Treasury Bonds, and why has the NYSE 20+ Year Treasury Bond index (AXTWEN) gone up so much in the last year (2011)?
I'm trying to understand the treasury bond market a little more, specifically why the NYSE 20+ Year Treasury Bond index (AXTWEN) has gone up so much in the last year, e.g. here. I've never really ...
5
votes
5answers
610 views
Roth IRA = Emergency Fund. Any Safe Investments?
I've been building my emergency fund through automatic deposits into a Roth IRA at TDAmeritrade. This has been working well, since the money is out of sight, out of mind, and I can easily withdraw it ...
4
votes
4answers
344 views
10-year real Treasury bond yield: How can it be zero, or negative?
How can the 10-year real Treasury bond yield be zero, or negative?
That's like giving out money for free, right? Does that mean that people expect the value of the dollar to go up (deflation)?
1
vote
1answer
94 views
Understand interest rate risk on a bond
I was wondering why there is interest rate risk on a bond that a financial services firm has sold, besides default risk on the bond? As far as I know interest rate risk means the risk that ...
1
vote
1answer
50 views
Where can I find information on corporate bonds (especially those rated as “junk”) ?
I've been searching a number of financial sites and I can't seem to find a way to browse for companies that are selling bonds, and what rates/durations those bonds are at. How does one go about ...
1
vote
1answer
26 views
Interest rates and bonds: What is their relation?
I read in a study text that:
When interest rates are decreasing, investors will migrate their bonds from short- to longer-term ones
When interest rates are increasing, investors will migrate their ...
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vote
2answers
1k views
Where can I find historical rates for corporate bonds?
Are there databases that track corporate bond interest rates and rates of return? How do I get access to them?
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2answers
109 views
Liquidity of U.S. treasury bonds and moving in and out of them before maturity?
I am curious about the liquidity of U.S. treasury bonds. I always hear about how liquid they are.
I like the rates of the 30 year treasury bonds but lets say I don't want to park money for 30 years. ...
4
votes
2answers
201 views
What is the purpose of a Zero Coupon Bond?
Why will someone prefer to buy a zero coupon bond rather than a >0% coupon bond?
0
votes
2answers
71 views
What is the coupon percentage of a perpetual bond specified relative to?
In "a 10% bond", I have been told 10% means the coupon rate of the bond relative to the par value not the price when it was bought.
But in "a 10% perpetuity", there is no par value to paid at the end ...
2
votes
1answer
112 views
How to buy a bond?
Since this question has been a tumbleweed I wanted to update the description to see if I get any answers.
This is the information that I have:
PR SALES TAX FING CORP A-1 RV CAV6.30 BE/R CUSIP: ...
2
votes
3answers
203 views
How can a bond guarantee a 5.5% return rate?
How can a bond guarantee a 5.5% return rate?
I am not sure how this is possible. I see that Puerto Rico has a municipal bond that gives more than 5.5%. How secure are these AA bonds? Why other AA ...
9
votes
5answers
149 views
What to sell when your financial needs change, stocks or bonds?
Say I have a portfolio composed of 80% index funds, and 20% bonds. This portfolio was created under the assumption I would have a relatively large income, and wouldn't need to withdraw any funds for a ...
2
votes
2answers
168 views
What's behind the long secular bull market in U.S. Treasuries?
Long-term treasury yields have been going down fairly continuously since the mid 1980s. Right now, the 30-year yield is under 3%, meaning that it is likely to barely keep up with inflation if held to ...
4
votes
5answers
412 views
Does the interest rate on a given US Treasury Bond change over time as the market rate changes?
This is obviously a very basic question:
Does the interest rate change on a given US Treasury Bond as the market rate changes?
For example: Let's say I buy a T-bill today, and the rate on the bill ...
9
votes
3answers
244 views
What is a “Junk Bond”?
I was reading Barbarians at the Gate and I read that junk bonds were required to do large leveraged buyouts. What is a junk bond and how does it differ from a regular bond? Why is there higher ...
8
votes
5answers
238 views
Are long-term bonds risky assets?
I think bonds are debt/loan and fixed-income, so they are risk-free, both short term and long term. But it seems like Bodie's Investment thinks long-term bonds are risky:
For example, assume that ...
6
votes
4answers
69 views
Does the market-value of a bond matter after purchase if waiting until “maturity”?
If I'm buying bonds at a certain value, and later on the market value drops (the company or country is in trouble, for example), but I still believe they would be able to pay – do I have ...
