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Questions tagged [bonds]

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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1answer
41 views

Treasury Expected Yield vs. Reality Difference

I looked at the US treasury website https://www.treasurydirect.gov/instit/annceresult/annceresult.htm and the usual percentage of interest one should get is around 2.4%. So, if I bought a 4-week ...
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1answer
66 views

Mathematic of bond pricing [closed]

Getting lost on an exercise hope you can help, thanks. A 1000 par value bond purchased two years ago at 890 now trades at 925. Coupons of 100 received at the end of each of the two preceding two ...
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0answers
35 views

What might a corporation consider to raise money? [duplicate]

If a corporation wishes to raise money but does not want to dilute the power of its current shareholders. what might the corporation consider?
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0answers
69 views

How can this ETF's cost basis be lower than the money I put in?

I invest in a long term treasury ETF. I have only been buying this and never sold any shares. I looked into the entire transaction history. There are three categories of transactions: Buy: These are ...
0
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1answer
27 views

Bond prices - present value

I'm reading a text of Macroeconomics - Financial Markets as a chapter. It has a line which states: "Suppose you hold two-year bonds. Because the price of a two year bond is $P, every dollar you put ...
1
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1answer
58 views

basic questions about US bond trading

I'm new to the bond trading, but have some basic questions. Let's suppose I want to buy the following bond today (11/6/2018) See this As you can see there, the maturity date of that bond is 11/30/...
1
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1answer
32 views

Characterising risks of an corporate/goverment bond ETF's

I have been looking at different conservative investment strategies such as 50/50 "interest fund", "global stock fund" and "the permanent portfolio". As an alternative, I was looking for corporate ...
8
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3answers
287 views

Is there anything wrong with having a portfolio consisting of a single fund?

Aside from cash reserves, the entire portfolio is in a Vanguard mutual fund that has a good split between domestic stocks and bonds. The split is at the target ratio the investor is looking for. Is ...
0
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1answer
63 views

What is the difference between SWK, SWJ, and SWP (Stanley Black & Decker)

Stanley Black & Decker seems to have three symbols on the NYSE. SWK: Stanley Black & Decker, Inc. SWP: Stanley Black & Decker, Inc. CORP UNIT 2017 SWJ: Stanley Black & Decker, Inc. JR ...
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2answers
63 views

Can you put an I-bond in a roth IRA?

I was wondering if I could do this, it just seems to make so much sense. You will be earning interest on your I-bond and you won't have to pay taxes until you take out your money during retirement. ...
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0answers
24 views

How does a typical bond ETF provide tax information to the investor in Canada?

Before deciding whether to use registered or unregistered (taxable in Canada) account, I'd like to understand the complexity of tax reporting as a result of holding bond ETF, for example BMO ZFL (long ...
2
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2answers
54 views

Simpler way of calculating duration for bonds?

So the question is: Find the duration of a 6% coupon bond making annual coupon payments if it has 3 years until maturity and has a yield to maturity of 6%. What is the duration if the yield to ...
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3answers
74 views

Understanding bond ETFs

I am failing to understand the bond ETFs. I somewhat understand stock ETFs: ETFs own stocks, I buy a part of ETF, therefore, I also indirectly own stocks. When I sell my share of ETF, the ETF gets ...
0
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1answer
51 views

Extension risk with IO bonds

I'm trying to understand the extension risk associated with interest only bonds in a CMO. When rates rise, prepayments drop, and so the life of the IO bonds is extended. This causes the value of the ...
2
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2answers
191 views

Am I confused about how to diversify into bonds?

I held several Vanguard equity ETFs (VFIAX, etc.) I wanted to diversify into bonds (as discussed in "A Random Walk Down Wall Street"), so I sold some of them and bought BLV. As stocks have declined, ...
1
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3answers
68 views

Is a bond's price dependent on yield or is it the other way?

Do changes in the price of a bond cause the yield to move? Or is it the change of rates and consideration of other risks that cause the yield to change which then affects the price of the bond?
0
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1answer
114 views

Bond sell off vs stocks

U.S. stocks fell following a bond selloff that sent yields to multi-year highs. New filings for unemployment fell unexpectedly to near 49-year lows. The benchmark 10-year U.S. Treasury yield rose ...
-2
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2answers
176 views

Can a chair(wo)man personally buy up the majority of its company's bond?

Can a chair(wo)man of a public company personally buy up the majority of a bond offered by that same company? Scenario: Public company issues corporate bond. Chair(wo)man of same company buys ...
6
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2answers
276 views

Is Mexico on the verge of defaulting on parts it’s national debt before Andrés López Obrador take office?

All bonds issued by Mexico with maturity scheduled for 2018 are traded at a huge discount of their face value. I mean whatever currency or stock exchange used here’s an example : For reference, they ...
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0answers
58 views

confusing returns from bonds

New to bond investment and seek clarification - On Charles Schwab Bond Source chart for fixed income offerings, the followings are listed CD 1yr: 2.6 Muni (AAA) 1yr: 2.71 I assume it meant ...
3
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2answers
75 views

Can you use fed interest rates to predict the share price of a bond ETF?

The Fed interest rate is inversely proportional to a bond's value: When the Fed increases interest rates, your bonds lose value. When the Fed decreases interest rates, your bonds gain value. Since ...
0
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1answer
34 views

MBS vs Corp or Muni bond. Please explain the difference

How are MBS different from corporate or municipal bonds that have a coupon attached? For example, if I invest 25,000 per year, how do I get the return? Is there a fixed coupon? Also, I heard of ...
0
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1answer
26 views

Optimal interest rate environment for mortgage-backed securities?

When rates rise MBS investors face extension risk and when rates are dropping investors face prepayment risk. If this is true then when is the optimal time to invest in MBS?
3
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3answers
98 views

Does a bond mutual fund qualify as “bonds” for the purposes of risk management?

I am re-balancing my portfolio to be a little more conservative. I am considering taking some of what's currently in equity ETFs and putting them into VBMFX, a "Total Bond Market Index Fund". Is ...
2
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2answers
102 views

Question about the Federal Funds Rate

As I understand it, the Fed will set a target for what it wants the Federal Funds Rate to be and then try to achieve this goal through its open market operations. Is the amount of volume that the Fed ...
0
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2answers
37 views

Bonds and CUSIPs

Does the CUSIP on a bond change every change? A relative of mine, who lives in the US, has a trade confirmation showing that she bought a municipal bond. The bond was called recently and that trade ...
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2answers
92 views

Are there any advantages of long term US treasury ETF's / funds?

I'm debating whether to include any long term US treasury bond ETF in my portfolio. Are there any reasons I would include it rather than go for other types such as intermediate term bond ETFs and US ...
1
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1answer
54 views

Another word for this kind of 'Corporate Bond'?

I'm currently working at a company that was acquired in the not too distant past. The company is still relatively small and still has a "start-up" mentality in a lot of ways, for better or for worse. ...
2
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0answers
45 views

Series EE Bonds [closed]

My mother has passed and I found 70,000 in Series EE Bonds. She was in a nursing home which she paid for until she ran out of money and then the state took over the bill. Can I cash the bonds or will ...
57
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10answers
13k views

Why don't bond makers just get loans?

I was just looking at investment opportunities, and I found a number of places offering bonds paying up to 12% interest over two years. My first thought was, I can get a loan from my bank for 5% ...
0
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1answer
57 views

Treasury bond yield

I am trying to learn about valuation and yields for treasury bonds. For the Treasury Bond maturing on 11/15/2018, initially sold in 1988 with a 9% coupon, it states that the yield to maturity is 1.66%....
1
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1answer
88 views

Bond Issuance Question

During a new bond issue how do the bankers/advisors determine an initial price for the bond? I know that during an IPO the investment bankers will guage demand for the issue, and price the issue ...
0
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2answers
59 views

how to estimate bond ETF price once interest rate changes?

I'm looking at an example bond ETF which track bonds that expire on 2027 which means its for almost 10 years to its intermediate-term bond tracking. I understand that if interest rate would go up, ...
0
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2answers
107 views

Do Junk Bonds have higher coupon rates then investment grade/treasury bonds

I'm trying to understand how junk bonds would incite investors to purchase them, did they offer higher coupon rates then the prevailing market or were they simple priced cheaply in order to ensure a ...
2
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1answer
77 views

Comparing bank to bond ETF

Let's say I have a bank savings account giving this interest: Rate: 1.736% APY: 1.75% (rate accounting for compounding interest) And there's a bond ETF SCHZ with these rates: TTM: Distribution ...
2
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1answer
75 views

Are High Yield Bonds issued at a premium or discount?

Will the demand for a higher yielding security cause the high yield bond to be issued at a premium, or will the risk of default and other risks cause the bonds to be issued at a discount to face value?...
1
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1answer
54 views

Where to find bond's face value?

After browsing an online broker's bonds offerings, I wanted to obtain some additional info on a particular bond. Specifically, its face value. I was expecting it to be listed on the broker (degiro), ...
0
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1answer
86 views

Why do CDO's have a reinvestment period?

If CDO's collect all the cashflows from their underlying assets and then pay them out to the CDO investors whats the need for a reinvestment period? and where is the principal that is being reinvested ...
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0answers
31 views

Buy shares and bonds in non citizens countries

I am from Sri Lanka and I invested in stock market and bond in Sri Lanka. But I really like to buy other countries shares and bonds. Is it possible to buy those thing without citizenship. I know ...
3
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2answers
211 views

Criteria for selecting Bond ETFs

My investments are split between 4 ETFs (US, International, REIT, and bonds). Until recently, bonds were a relatively small part of the portfolio so I didn't put much thought into it and selected a ...
1
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1answer
48 views

Meaning of 10-year treasury note price change

At this moment, WSJ quotes 10-year T-note as below: Price: $100 3/32 Price change: -2/32 (-0.08%) Question 1: Where does the -0.08% change come from? To me, it seems the old price is 100 5/32. ...
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3answers
59 views

Which type of yield do finance professionals refer to when talking about “bond yields”

I am aware that there are many different ways to measure a bonds yield including YTM and the Current Yield. However I am not quite sure which yield is being referred to in a yield curve and other ...
3
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2answers
172 views

What do people mean when they say US 10 year Government Bond?

I am very new to investing and I am particularly interested in fixed income product. I am just wondering what do people mean when they say US 10 year Government Bond? This term confuses me as I can ...
0
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1answer
79 views

How should I interpret information about bond spreads that narrowed or widened the most?

How should I interpret information about bond spreads that narrowed or widened the most? I see this information in the financial pages in the newspaper, and have some ideas about what it means, but ...
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1answer
65 views

Bond Yield Calculation

A $1000 face value coupon bond has a 10% coupon rate, a maturity of 4 years, and a price of $950. Calculate the present value of the bond when the interest rate is 12%. Must the yield to ...
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5answers
6k views

Why invest in long term government bonds when the yield curve is inverting?

The New York Times has noted that the US is heading toward an inverted yield curve, which is one of the precursors for a recession. The yield curve is said to be inverted when long term government ...
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1answer
97 views

Bond ETF's: why isn't the nominal value of the underlying asset mentioned anywhere?

I am wondering why you never see the (weighted) nominal value of the underlying assets of a bond ETF mentioned anywhere. It seems to me this information is needed to determine whether a bond ETF is ...
2
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1answer
97 views

UK bond yield below inflation rate means negative ROI likely if held until maturity?

Current UK bonds have nominal interest rates well below the current inflation rate, even the long-term ones. If we assume that, on average, the inflation rate remains the same or rises, and the bonds ...
2
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3answers
98 views

Difference between bond fund and bond index fund

What is the difference between a bond fund and a bond index fund? For example, FIJEX is labeled as a normal bond fund with a gross expense ratio of 0.51% and SWSBX is a bond index fund with a much ...
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9answers
6k views

What does one typically use as a money reservoir for stocks, when they are “on sale”?

I've read about people who claim to have made a lot of money investing in stocks (or funds) after a crash. They say the stocks were "on sale". But I wonder, where did they get the money to buy these ...