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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Is my diversified investment strategy wise?

I maintain asset allocation of 10% cash, 70% equity (Domestic and International), and 20% bonds (mixed Domestic and International). I maintain only Morningstar 5-star mutual funds for all equity and ...
3
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1answer
132 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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44 views

Bond and Payments question

A 10-year bond of a firm in severe financial distress has a coupon rate of 14% and sells for $900. The firm is currently renegotiating the debt, and it appears that the lenders will allow the firm to ...
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46 views

What is the minimum investment in a bond

I am looking at some Canadian bonds. What is the minimum amount that I can invest in each of these bonds? Is it the same for all or is it different for each bond?
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50 views

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
21 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 ...
3
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1answer
60 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?
3
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1answer
59 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
46 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
46 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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2answers
398 views

How can one short German bonds?

Does anybody know what is the best way to short German bonds?
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1answer
101 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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1answer
39 views

historical data for analysing pensions

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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3answers
113 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
34 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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1answer
20 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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1answer
35 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
49 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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0answers
30 views

What is the expected value of a bond coupon payment?

What is the expected cashflow at each coupon payment if I want to take into account a default rate and some arbitrary recovery rate of the face value? I was thinking it would be equal to (probability ...
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1answer
47 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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2answers
46 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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0answers
32 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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0answers
16 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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1answer
42 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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1answer
102 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 ...
2
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1answer
30 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
66 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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1answer
75 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
47 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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2answers
79 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 ...
2
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1answer
97 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
187 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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1answer
54 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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1answer
44 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
35 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
96 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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1answer
324 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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0answers
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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2answers
120 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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1answer
50 views

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 ...
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0answers
57 views

best way to keep track of your portfolio, total income / loss for both equities, funds and bonds

Is there any recommended web based tool which allows you to keep track of your investment portfolio, be it equities, funds, or bonds? In the case of bonds, and equities which pay a dividend, I would ...
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2answers
56 views

Net Cash Flows from Selling the Bond and Investing

I am a beginner finance student, i am having trouble understanding short sale.In this context the bond is priced at 960.00 and will give a future payment of 1000 1 yr from the day it was bought. I ...
3
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1answer
102 views

How to compare goverment bonds to generic money market position?

I know that the bonds are higher risk investment so I'd like to compare the bond funds/ETFs with the market sweep offered by account to decide on proper mix. However I'm confused of how to read ETF ...
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1answer
42 views

Calculating the Price of a Bond

Would someone be able to help me understand if I am doing this calculation for some homework correctly? I know I could do it on my calculator, but I'm trying to understand the process behind it as ...
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3answers
70 views

Does pursuing the highest yields or pursuing the lowest ones give better returns in the long run?

Consider two people (Alice and Bob) who have some money each month to save and invest in government bonds of their own country (because they want it to be liquid, and have the smallest risk of ...
2
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2answers
192 views

Ready to invest but I'm overwhelmed with the number of brokers and services

I have £15,000 - £20,000 to invest for the long term and I've researched what I will regularly invest in to: Pension, Index funds, Bonds, small number of individual stocks (maybe) as well as my cash ...
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2answers
60 views

Different avenues of tangible returns from index funds and bond funds

I am a beginner investor and I've been out of school at this point having saved enough to seriously look at where I am investing my money. I have decided to start off with a portfolio that is ...
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1answer
71 views

Rationale behind discount bonds?

I'm trying to understand if my rationale behind discount bonds is correct. Let's say Company X issues a 2 year $1000 bond at 5%, market interest rate is 10%. Because the coupon rate < the market ...
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2answers
127 views

What happens to bonds values when interest rates rise? [duplicate]

I want to invest 10% of my portfolio into bonds. The other 90% will go into stock. I took a look at Government Bonds which TD Ameritrade offers at a $5000.00 minimum. This is a little over my ...
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1answer
58 views

What factors should I consider in picking a bond?

I have invested in stocks previously but realized that it isn't for me, at least for now. I have been researching on other options as to where I should invest my money and I found myself looking into ...