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.

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Does the P/E ratio not apply to bond ETFs?

I cannot seem to find them on any website, but I have seen their existence for stock ETFs. If the answer to the question entitled is 'no', then why not? I exemplify with 2 ETFs: Blackrock (Canada)'s ...
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99 views

Helping my family sell their oil stocks. What to buy? [closed]

sorry I'm a bit new to the investing world. I am familiar with most topic from my business minor. My family has a lot of their retirement in oil company stock. (I know, diversify.. they don't know) ...
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78 views

Why should investors care about the interest rate risk, if they only care about the money they have at retirement?

I understand the concept of the interest rate risk (bonds lose value as the discount rate increases). However, if an investor only cares about how much money he will have at retirement and he wants a ...
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114 views

What are some good books for learning stocks, bonds, derivatives e.t.c for beginner with a math background?

Despite being STEM person, I always wanted to learn how stock & financial markets work. I always wanted to know how those stocks work, what are those bonds e.t.c. The only struggle I am having, ...
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158 views

Given current market conditions, how / when should I invest a $200k inheritance?

Situation: I have $100k in an IRA with Betterment, plus just inherited $200k - currently cash. I'm 34 years old and salary is $97k, with no debt. Goals: IRA: growth of principle for retirement ...
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45 views

Are bond ETFs considered low risk in this market?

I'm thinking about moving my money to an automated management service. I've set my risk profile to 3.5 (low) which means they would invest around 35% in bond ETFs. With today's interest rates being ...
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131 views

Advice for a college student interested in investment opportunities.

I'm 20 years old and currently attending university for a double major in engineering and science fields. My college expenses are being covered. In addition to that i have worked for the past few ...
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115 views

How do investors know what the discount rate is?

Let's say that Jim buys a bond whose face value is 100$ and has a 4.75% coupon, with coupon payments given annually, that matures in 5 years. Jim buys this bond today for 103.05$. Letting x ...
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22 views

Calculating the rate of return (ROR) when buying and selling bonds that carry cupons?

Suppose I have bought a bond in some price - X, for 10 years. Now I decide to sell it 2 years after the purchase for some price - Y. I would like to calculate the ROR I got from this bond. My real ...
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30 views

How to calculate after-tax return if investor can use capital loss, in Canada?

[Source:] As you can see in the table, the $105,000 government bond matures at $100,000, for a capital loss of $5,000. The investor would also collect interest totalling $9,660 over the three years ...
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94 views

Bond ETFs vs actual bonds

If the goal is to diversify a portfolio and add bond investments in a manner like that described in Intelligent Investor, would owning a bond ETF provide the required diversity or does it need to be ...
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80 views

Should you diversify your bond investments across many foreign countries?

I already know, and so ask not, about the benefits and need of bond diversification across different kinds, maturities, and ratings (eg Short- vs Long-term, AAA to corporate). Global diversification ...
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82 views

Related Hedges (How do they work?)

I'm currently re-reading Benjamin Graham's book, The Intelligent Investor. In it (Chapter 15), Graham mentions some of the undertakings and operations his fund, Graham-Newman Corporation, was involved ...
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87 views

Are a bond's yield and interest rate the same thing?

Are they the same thing? Is yield the annualized return rate? Why when yield rise, yearly return increases, but price falls?
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161 views

Structure of Final Bond Payment

If I buy a bond and hold it to maturity, will the final payment be dependent on the current price of the bond, or will it be the amount I originally paid?
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Why is a 2-year bond not a good store of nominal value?

I was recently confronted with the following question: Which of the following is not a good store of nominal value? a: checking deposit b: savings deposit c: 1 2-year bond d: a 3-month CD The ...
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1answer
26 views

Can I buy a bond at par if I buy it at the time of issuance directly from the issuer

When a company issues bonds, if I buy directly from the company at the time it is being issued, can I hope to buy the bond at par? I am looking at canadian bonds and all of them are selling at premium ...
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68 views

Do longer term bondholders get preference in getting money back when a company defaults?

When a company defaults on its debt, would the 10 year bondholders be given preference to the 1 yearr bondholders while paying out money? What is the order of preference?
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113 views

What does “compression of spreads on high-yield debt” mean?

What did Federal Reserve Chair Janet Yellen mean when she said the following? "We’ve also seen the compression of spreads on high-yield debt, which certainly looks like a reach for yield type of ...
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1answer
57 views

Do we pay interest rates when holding a bond?

When we try to find the present value of a bond I understand we should discount the coupon payments and the face value by the ''current interest rates''. My question is what are these interest rates? ...
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1answer
60 views

How to Buy “Exotic” Bonds as a Low Net Worth Individual?

I'm a low net worth individual looking into investing into Junk Bonds but I have no idea where to start! I understand that you will need to buy through broker. But I am struggling to find brokers ...
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573 views

How can one short German bonds?

Does anybody know what is the best way to short German bonds?
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366 views

Ray Dalio - All Weather Portfolio

I am in a difficult situation right now where I need some expert advice. I recently finished reading Tony Robbin's Money Master the Game book and he talks about Ray Dalio All Weather Portfolio ...
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57 views

historical data for analysing pensions [closed]

It is my contention that one of the benefits of a pension is that it provides a system for age-averaging. Imagine three people, each born five years apart (say 1960, 1965 and 1970). These three ...
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140 views

Is buying puts on a ten-year treasury ETF a good way to hedge mortgage rates?

I'm looking to hedge against rising thirty-year mortgage rates for the short term while we are house shopping. Would buying an appropriate number of put options on something like IEF (iShares ...
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1answer
41 views

What is the difference between issuing company and holding company in a convertible bond

I am researching convertible bonds in Canada. While looking at the index etf that tracks convertible bonds, CVD What I don't understand is how come the list of Top 10 issuers is different from teh ...
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26 views

'longer-term/lower-coupon bonds' vs 'shorter-term/higher-coupon bonds'

[Source:] Arthur Salzer, B.A. Econ. (McMaster University), CFA, CIM “Remember that longer-term/lower-coupon bonds go down more in price than shorter-term/higher-coupon bonds do when interest ...
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41 views

Always invest in a bond ETF with at least inflation protection?

I abbreviate: inflation-protected bonds = IPB (I choose this term because I don't want to limit this question to US TIPS); yield to maturity = YTM. Whenever deciding to invest in a bond ETF, should ...
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1answer
167 views

What is the Average Yield on High-Grade Corporate Bonds as of Now?

I am looking to update the formula used by Benjamin Graham to calculate a stock's intrinsic value. His most recent formula can be found at http://en.wikipedia.org/wiki/Benjamin_Graham_formula. The ...
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81 views

No maturity, for bonds in ETFs or bond ETFs?

1. User Chris W. Rea answered: When interest rates rise, the market value of 20-year bonds will drop, and drop more than shorter-term bonds would. Your principal is not protected in the short ...
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55 views

Demand for investment-grade bonds with more than 10% coupon?

Though originally posted as a comment here, I don't see an answer. So please allow me to resurrect and broaden this question, to all investment-grade bonds: in other words, 'BBB- or higher by ...
2
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1answer
44 views

If bonds' current yields soar, then should you hold yours until maturity?

[Source:] To be able to hold a bond to maturity, you need to have the discipline to hold on, even if the value shifts dramatically. In 2012, that means that if our ridiculously low interest rates ...
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21 views

Bonds: Inflation, Real Interest Rate, Price, Current Yield

1. Am I perfectly right about the relationships among these 4 factors? Anything to add? Inflation   inversely varies with   Market real interest rate   inversely varies with   bond price     ...
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59 views

Investors may never recover … losses from bond funds?

Source: In a rising interest rate world, ... own bonds or bond funds?, by Gail Bebee, 2013 Jul 2 Managing a bond portfolio takes work and is not feasible for smaller accounts. Consequently, many ...
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106 views

Is there any data that shows how diversifying results in better returns than just sticking to an all-stock portfolio?

Assuming that the money invested is not to be touched for decades (so the risk of temporary market downturns is irrelevant in this case), many suggest that you should still diversify your portfolio ...
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1answer
51 views

Does anyone know where I can find a free efficient frontier tool, or an informative and legitamate/academic graph of the efficient frontier?

I'd like to build a portfolio based upon modern portfolio theory and I'd like to find a tool I can use to calculate the proper mix of asset classes. Can anyone help with this? I think a good ...
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1answer
88 views

Are bonds taxed every year or only at maturity

If I buy a bond that matures in 2 years, do i pay taxes only when i get my principal and interest back at maturity? Or do i pay some taxes on year1 and rest on year2?
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112 views

When a bond is called back by issuer, do i still get the interest, or only the principal back

If i buy a one year callable bond at par, with yield to maturity = 3%, and if the bond gets called after a month, then do i still get approx 3%/4= 0.75% interest when the bond is called back? Or can ...
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1answer
54 views

Is there a way to avoid short-term capital gains taxes on bond funds?

It appears that most bond ETFs pay out monthly distributions from interest earnings. Is there a way to directly reinvesting the earnings on the fund without triggering a taxable event? Are there any ...
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93 views

Does it make sense to invest in bonds when interest rates are likely to rise? [closed]

Thinking about a possible increase in interest rates in the future, does it make sense to invest in bonds? Would the price of a bond fund holding mostly AAA rated Fannie/Freddie issues, and medium ...
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1answer
116 views

should i cash some twenty year old EE savings bonds?

I have, let's say, $20,000 in series EE savings bonds, issued in 1995. As I understand it they were purchased for half their face value ($10,000) and have now matured to their full value since it's ...
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4answers
218 views

Over the long term, why invest in bonds?

Over the long term, stocks have historically beaten bond returns, even after accounting for the periodic market crashes. The general consensus is that your portfolio should at least be 25% in bonds. ...
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58 views

Are Bond funds a good idea [closed]

How should one mitigate losses of last week? I am concerned but tend to move to quickly
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52 views

Amortizing bond premiums for corporate bonds?

I know you can amortize bond premiums on your US tax return. You can keep deducting the amortized amount every year till maturity. However, if you decide to sell the bond before maturity and have been ...
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1answer
51 views

How do I know what is the current market interest rate for bonds?

It's said in books and articles that when the "interest rate" rises, the price of bonds becomes lesser, and vice versa. Intuitively, this is reasonable since bonds with higher interest rates are ...
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2answers
107 views

Why buy bonds when GICs offer better interest

As an individual investor, AAA rated bonds and even AA rated bonds provide much lower interest rates than a conventional GIC from a reputed institution backed by CDIC. So who would ever want to buy a ...
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350 views

What happens to the bond ETF when the underlying bond matures

When a bond matures, what happens to the corresponding bond ETF? It still keeps on going as if nothing has happened. How does this work? I guess there is some kind of rolling over happening here, but ...
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26 views

Bonds semi-annual market rate [duplicate]

Let's say you have a bond that pays semi-annually with a 10% coupon rate. Each half-year you pay 5% of the principal. Let's say the market rate is 12%. How come to calculate bond price, we discount ...
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156 views

Is there any real purpose in purchasing bonds?

I am new to investing, for the most part, and I have learned a decent amount about how bonds work. What I wish to know more of is simple: Is there any real profit to it, and is it worth it? From the ...
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Understanding payment options with NS&I Bonds

So, just like many, my parents want to invest in: http://www.nsandi.com/65-guaranteed-growth-bonds?ccd=NALBAA since they are supposed to be quite good however, there is a genuine fear that the money ...