All Questions
140 questions
4
votes
3
answers
361
views
What is the best low-risk, short-term(3-month) option to invest 50K?
I currently have $50,000 in cash and am looking for a safe, low-risk place to invest it for a 3-month period. My main priority is to avoid any options that have a risk of losing money, as I want to ...
- 151
4
votes
2
answers
664
views
Is it feasible for a small retail UK resident to buy UK inflation-linked GILTs directly from the issuer?
I'm interested in buying individual inflation-linked GILTs directly in the primary market (directly from the UK Debt Management Office).
To give some context, I want to do this as I understand the ...
- 1,283
3
votes
1
answer
58
views
Where to find the variable interest calculation formula for a bond?
I am a relatively new investor based in Germany and am trying to decide whether to put some money (intended for a house downpayment in 3-4 years) into government bonds. For example this one:
https://...
13
votes
4
answers
3k
views
Why doesn't my bond ETF provide a hedge against stock indexes in the way I thought it would?
I own BND in an attempt to hedge my portfolio against my stock ETF declines, based off of the Bogleheads philosophy. I've noticed that with this ETF, over the relative long term, I've made but modest ...
1
vote
1
answer
241
views
betting on rates going down using bonds
There is a strategy that I am thinking of and would love to know about downsides: people buy/sell bonds to have a guaranteed return if held to maturity. But they also buy to take a directional view on ...
- 565
0
votes
2
answers
138
views
How to understand this investment portfolio list?
I have a table with the colunmns ISIN, Asset Class, Description, Nominal/Quantity, Market Value CHF. I would like to check how much is invested in a specific company, let's say Boeing. How do I find ...
- 831
-3
votes
3
answers
401
views
Why is YTW (Yield-to-Worst) not available for some callable bonds?
E.g., I am looking at 67765QDG8 ("Oh St Wtr Dev Auth REV 5% 06/01/2023") on Schwab. It is callable but the yield to worse isn't indicated:
Bond details: https://i.sstatic.net/GNt20.jpg (&...
- 11.5k
-4
votes
1
answer
115
views
Is it financially preferable to purchase Treasury bonds on the primary market or on the secondary market? [duplicate]
Assume a retail investor who:
can purchase Treasury bonds on the secondary market through their broker without any fees or markups (e.g., via Charles Schwab).
can only submit non-competitive bids ...
- 11.5k
-4
votes
1
answer
102
views
Why does buying Treasury bonds on the secondary market make it easier to sell Treasury bonds at a later date?
I read:
Buying on the secondary market also makes it easier to sell Treasury bonds at a later date.
Why does buying Treasury bonds on the secondary market make it easier to sell Treasury bonds at a ...
- 11.5k
0
votes
1
answer
72
views
How can one compare the yield of a municipal money fund with the yield of a municipal bond?
Let's consider the following municipal money fund and the following municipal bond:
The Schwab Municipal Money Fund (Investor Shares) (SWTXX) discloses a 7-day yield (with waivers) as of 02/28/2023 ...
- 11.5k
-3
votes
2
answers
207
views
Are there any downside in investing in a municipal money fund instead of purchasing municipal bonds assuming the money fund's yield > muni bond yield?
I wonder whether there exists any downsides in investing in a municipal money fund instead of purchasing municipal bond, assuming the money fund's yield (tax-free) is higher than the muni bond yield (...
- 11.5k
5
votes
2
answers
914
views
How should I invest if I have much disposable income and cash on hand?
I'm a 29-year-old living in Europe and I'm looking for some investment advice.
I’m fortunate enough to be earning roughly $28k per month after tax, and I currently have about $400k in cash sitting in ...
- 151
2
votes
1
answer
233
views
What are the downsides, if any, of purchasing bonds on the secondary market instead of the primary market?
Let's ignore the transaction fees from my broker, which tend to be higher for the secondary market. Are there any other downsides of purchasing bonds on the secondary market instead of the primary ...
- 11.5k
1
vote
1
answer
288
views
How shall one take into account the accrued interest when purchasing a bond on the secondary market?
For example, I'm looking at the following US Treasury bonds ordered by decreasing yield to maturity (YTM) on Charles Schwab:
If I simply want to maximize the returns, assuming no default risk, should ...
- 11.5k
0
votes
3
answers
169
views
If the nominal interest rate on bonds becomes 10% and the historical average return of stocks in the US is 10% why would you ever invest in stocks?
It seems like given the lower volatility of bonds and the prospect of equivalent return, bonds are the better deal. Am I missing something?
- 101
1
vote
1
answer
540
views
Price of Bond with irregular long first coupon period
I'm trying to manually calculate the price of a bond with a long first coupon period, found a few candidate formulas on
Microsoft Excel Document: OddFPrice
mit.edu: OddFPrice
WestClinTech.com: ...
- 11
1
vote
1
answer
211
views
Why would someone want to sell a bond for 50% less than what they paid?
I was looking on DeGiro and I saw some corporate bonds up for sale for very low amounts e.g. 34.11 and 52.00. Since the standard or baseline amount is 100.00 these bonds seem to be up for sale for 520 ...
- 155
1
vote
1
answer
60
views
How can I interpret this bond chart?
I am looking into buying a bond on DeGiro. I am new to this platform and to buying bonds.
From what I understand, bonds are usually issued in multiples of 1k and have a coupon rate that is paid to you ...
- 155
0
votes
1
answer
323
views
Calculating the cost basis on a tax free Zero Coupon Bond
A tax free zero coupon bond is issued with a yield to maturity of 3.5%. After some time, an
investor buys the bond at 50. ( 50 cents on the dollar ). When he buys the bond, the bond has a yield to ...
- 2,022
6
votes
3
answers
2k
views
Do bond funds have an inherent advantage over individual bonds within a portfolio?
Background: I am constructing a simple ETF portfolio consisting of 70% stocks and 30% bonds. Every three months, I will add money into the portfolio, and rebalance the portfolio to restore its 70/30 ...
- 17.2k
2
votes
1
answer
76
views
How can I find the price (not just the yield) of a treasury bond? [closed]
Sorry if this is a dumb question, but whenever I want to look up the US treasury bond, I can only find the historical chart for its yield. But how could I find its historical price ($1183.28 as in the ...
- 165
2
votes
1
answer
170
views
Trying to understand the U.S. yield curve and global inflation
With the COVID crisis the FED has lower interest rates a lot:
Now, inspecting the US yield curve:
It seems to be that this is a normal curve that doesn't flatten too much at the end. Is this correct?...
- 1,283
0
votes
1
answer
136
views
What is the effect of rising interest rates on a Bond Fund?
For Example:
Assume you purchase $1,000 of a bond fund. If the bond fund has an average duration of 5 years and general interest rates increase 1% , what is the impact on the value of the bond. What ...
- 11
1
vote
1
answer
91
views
Rundown on minimum initial investments?
I found while looking at money market/purchased money funds that while there is no minimum initial investment for SWVVX ("investor shares") there was a minimum initial investment of $1,000,...
- 447
0
votes
1
answer
84
views
How important is it to read a company's articles of incorporation and corporate bylaws before buying its securities?
I am advised to read bond prospectuses before buying bonds because "every bond issue is different". The same advice is also given when investing in preferred stocks. When it comes to buying ...
- 17.2k
0
votes
1
answer
288
views
Is a 100% bond allocation wise for people who cannot handle stock market fluctuations?
Consider a person who constantly worries about stock prices, and has a history of severe panic during stock market crashes. This person also happens to hold a diversified portfolio of investment-grade ...
- 17.2k
1
vote
1
answer
140
views
What are some good reasons to buy U.S. Government debt (Treasury bonds)? [closed]
Treasury bonds issued by the U.S. Government are considered virtually risk-free, because they are backed by the U.S. Government's ability to tax in order to pay them off.
I understand that Treasury ...
- 665
2
votes
0
answers
71
views
What drives long duration US Treasury Bond ETF prices?
I am looking at TLT, for example, a long duration (with average maturity around 25 years) bond ETF. I noticed that the fed funds rate (or the "interest rate" from federal reserve) has been ...
- 291
0
votes
1
answer
162
views
Difference between the Interest rate of bond and the interest rate of central bank
Does the increase or decrease of the Interest rate (coupon rate) of bonds have the same effect as rising or falling interest rate of the central bank on the economy? In other words when we say that ...
- 69
6
votes
2
answers
2k
views
Income vs growth securities in a downturn
It's generally accepted that "income (dividends) and growth (capital gains) are perfect substitutes (tax and transaction costs aside)". i.e. "In financial theory, there is no reason for a difference ...
- 165
1
vote
1
answer
256
views
I don't get the following sentence in The Intelligent Investor book
I'm a newcomer in this "Market thing", and I'm learning from books and videos. I'm currently reading "The Intelligent Investor" and I don't understand the following sentence:
In 1925, plowing ...
- 121
0
votes
0
answers
142
views
What do bond investors do during a sell-off
Suppose there has been some release of data that shows economic slowdown, or increased expectations of inflation. Investors will then sell their bonds in hope of buying newer bonds with higher ...
- 271
1
vote
4
answers
679
views
Why do rich people prefer shares with dividend over bonds?
The first thing that came to my mind is because they can use their voting power, but then Warren Buffett started with shares (and then he didn't have enough voting power) and not bonds.
Why do rich ...
- 323
1
vote
1
answer
145
views
Is it good if a network marketing company is not asking for an investment? [closed]
And does network marketing include any interest or compound interest?
A network marketing company is not ask for any investment, and they have halal certificate. I would like to ask if network ...
- 11
0
votes
2
answers
195
views
Short-term Corporate Bond has Higher Yield than Long-term. Why is This?
I looked at the past yields of Sears Holdings (before chapter 11) and the Yield to Maturity (YTM) were all as I would expect. I look at current yields of JCP and they are pretty much as one would ...
4
votes
3
answers
301
views
Why would one buy a bond with negative rate? [duplicate]
I see presently that many countries outside the U.S. have negative rate government bonds. So you buy one for $101 and in 5 years you get $100 back (face value). (I picked numbers for simplicity).
I ...
- 363
3
votes
2
answers
274
views
How to interpret negative bond yield quote
I am trying to understand investing in (non-us) government bonds.
Looking at data I can find online regarding the bonds available in my broker is giving me information I can't make sense of.
For ...
- 31
2
votes
1
answer
204
views
Negative rates on government bonds
Take the german 10J-Bundesanleihe for example, as far as I know the rates for it went negative recently.
Is there any incentive for private investors / or institutional ones to invest now into this ...
- 23
9
votes
4
answers
1k
views
What is the purpose of bonds within an investment portfolio?
Are bonds part of an investment portfolio so that you can invest during a dip in the market? (I heard this from a robo-advisor as it allows you flexibility to invest during a downturn)
Or do bonds ...
- 153
5
votes
1
answer
215
views
What's to prevent majority shareholders in a company from dilluting a convertible note?
A company issues a convertible bond to an investor. It has a par value of $10,000 and can be converted into 5 shares.
The company currently has 50 outstanding shares, so the bond corresponds to ~9% (...
- 161
1
vote
2
answers
284
views
How to pick ETFs that hedge against stock market crashes?
If I want to hedge against a stock market crash the advice I often see is “diversify” and “buy bonds.” As a result, my portfolio is primarily Vanguard VTI and Vanguard BLV, the total stock market ...
- 113
2
votes
3
answers
927
views
Bond fund vs High interest savings account
If you have some money - lets say 20k USD. Banks such as Ally provide 2.2% interest rate on Fixed deposits. Is investing in bond funds such as VBTLX safe and better than fixed deposit?
Understand ...
- 143
6
votes
2
answers
513
views
Is there a catch in investing in treasuries close to maturity date?
Is there a catch to invest to treasuries close to maturity date?
I don't want to lock the money for a long time, b/c the interest rate probably will go up. But I am concern that it's not that simple.
...
- 111
1
vote
2
answers
261
views
Bonds, interest rates and inflation
I was reading Learn to Earn by Peter Lynch and I came across a paragraph that has confused me to say the least. It is regarding bonds -
If you buy a $10,000 ten-year bond and hold it for ten years,...
0
votes
1
answer
143
views
U.S. 10 year treasury bonds behavior during crisis
It's often advised to buy and keep government bond to protect ourselves against the next upcoming crisis. (For example, in a defensive stock portfolio you can have 50% of stock and maybe 30% of ...
1
vote
2
answers
242
views
What kind of bonds are ideal for short term investments
I have money in my bank right and I want to acces them in 1-2 years. I am not willing to take the risk in a stock portfolio, but willing to make bond investments riskier than buying government bonds.
...
- 165
0
votes
4
answers
590
views
Are there any non-decreasing securities on the stock market?
Are there any securities traded on the stock market (i.e. ETPs) that never decrease in value?
As an aside (in case anyone mentions bonds):
I'm aware there's ETFs for AAA-rated government bonds, but ...
0
votes
1
answer
110
views
Common diversification strategy for bond investment?
What is the most common diversification strategy for bond investment for a long term investor?
long vs. intermediate vs short term
inflation protected (TIPS)
US vs world
government vs corporate
etc. ...
- 298
0
votes
0
answers
64
views
Bond ETFs slowing down after 2015. - why?
I see a lot of bond ETFs have very low gain, or even stay flat during 2015. - today.
For example Eurozone Government Bond or US Treasuries.
What is the reason for this?
- 298
41
votes
10
answers
23k
views
Why would anyone buy U.S. Treasury Bills?
From the Treasury Direct website, I saw this
Bills: U.S. Treasury Bills are a type of short-term security of one year or less, usually issued at a discount. The discount is the amount the security ...
- 683