Bonds : Bonds
The bond market is composed of securities that are fundamentally loans from investors to borrowers. Borrowers are made up of of companies, states and even our governments. The purchasers of these bonds can vary from individuals to banks to insurance companies.
The rate of profits is influenced by the coupon. More often than not spanning months to years, the coupon sets the interest rate paid to the lender across the time span stated. Bonds are also accepted as fixed income securities mainly because the interest rate offered is fixed and identified to interested parties when the bond is up for sale.
Why trade bonds?. There are some advantages that bonds have over other investments such as the stock market. When you buy a bond you are investing in debt rather than equity (stocks). Should tragedy ever befall the bond issuer, say a bankruptcy, creditors (debt-holders) get paid before shareholders do.
Bonds are regularly a more secure investment than stocks, futures, forex and commodities will ever be. However, there are no markets that are without risk. There are. Rather, bonds offer a careful investment opportunity. They pay-off is commonly a lot less than other more exciting investments but that is the trade-off for a good measure of security. As such, bonds are often an overlooked investment as a significant amount people opt for higher risk investments such as forex trading, stocks and commodities.
While Japan issues the second largest amount of bonds in the world, United States issues the the largest part. The bonds market saw some 80 trillion dollars in purchases for the year 2008.
Bonds are not without their disadvantages. Big profits come only to those that purchase substantial quantities outside the means of most. There is always the risk of not being able to sell your bond when the time is ripe. Forex orders on the other hand can be sold immediately. Last but not least, bonds are not traded the way currencies and shares are.
In Malaysia, bonds should still be seen as stable investment opportunities. Those of you in Malaysia that are on the careful side should feel comfortable with the bonds market. Just don't look forward to pay-outs like you would get in the stock market. - 23210
The rate of profits is influenced by the coupon. More often than not spanning months to years, the coupon sets the interest rate paid to the lender across the time span stated. Bonds are also accepted as fixed income securities mainly because the interest rate offered is fixed and identified to interested parties when the bond is up for sale.
Why trade bonds?. There are some advantages that bonds have over other investments such as the stock market. When you buy a bond you are investing in debt rather than equity (stocks). Should tragedy ever befall the bond issuer, say a bankruptcy, creditors (debt-holders) get paid before shareholders do.
Bonds are regularly a more secure investment than stocks, futures, forex and commodities will ever be. However, there are no markets that are without risk. There are. Rather, bonds offer a careful investment opportunity. They pay-off is commonly a lot less than other more exciting investments but that is the trade-off for a good measure of security. As such, bonds are often an overlooked investment as a significant amount people opt for higher risk investments such as forex trading, stocks and commodities.
While Japan issues the second largest amount of bonds in the world, United States issues the the largest part. The bonds market saw some 80 trillion dollars in purchases for the year 2008.
Bonds are not without their disadvantages. Big profits come only to those that purchase substantial quantities outside the means of most. There is always the risk of not being able to sell your bond when the time is ripe. Forex orders on the other hand can be sold immediately. Last but not least, bonds are not traded the way currencies and shares are.
In Malaysia, bonds should still be seen as stable investment opportunities. Those of you in Malaysia that are on the careful side should feel comfortable with the bonds market. Just don't look forward to pay-outs like you would get in the stock market. - 23210
About the Author:
More Information on Bonds and Stocks in the links mentioned. The Author has been investing online for over 7 years. When Prema De Silva is not trading mutual funds, she expands her knowledge on online investing and oversees the operation of a popular forex Trading trading website.
posted by X - Men @ 7:32 AM
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