Category Archives: Bonds
Which countries around the world offer good prospects for investments in government bonds? The choices available to investors are numerous and some countries may be a better investment choice than others. Some governments around the world are experiencing a debt crisis, and the most public of these is the situation in Greece. Other governments may be a solid or ideal choice for investors because the bonds offered are considered a very low risk for default.
The municipal bond market carries two distinct types of bonds. One is the revenue bond which is guaranteed by tax revenues and local appropriation bonds which do not have the guarantee that there is a unique revenue source. California muni bonds are not different than any other municipal bond; they carry the risk of default.
To better understand the advantages of municipal bonds ETF or exchange traded funds vs regular broker bonds terms need to be defined. Bond ETFs consists of muni bonds or local government bonds. Local governments issue debt bonds to raise capital for towns, cities, and counties, to help with urban development, education, utilities or infrastructure.
All investments walk a line between potential returns and risks. A risk is the chance you will lose some of all of your money and a return is the money you make on an investment. To gain the higher return, you generally need to take a greater risk and those investments with lower risk have the lowest returns.
Corporate bond interest rates today compared with the historical value of these bonds may paint a surprising picture for some investors. In 2007 the average interest rates for a corporate bond that received an AAA rating from Moody’s was between 5.23% and 5.99% through the year. In 2008 the AAA average rate was from 5.29% to 5.89%
Investing in corporate bonds versus government bonds and municipal bonds is a topic that many investors struggle with. Both types of bonds have benefits and drawbacks, and each may be right for some investors but completely wrong for others. All bonds are rated according to the credit rating of the company
Investors spend a lot of time looking for the best short term corporate bonds, but what makes a bond the best? This will depend on the individual investor and the specific goals desired. Long term corporate bonds tie up capital for extended periods and this is one reason why investors may choose shorter term options instead.
1. HCP Inc., symbol HCP- One of the top investment grade corporate bonds according to many financial experts the current HCP Inc. senior unsecured note matures in 2019 and offers a rate on the coupon of 3.75%. This bond is callable and it has a rating from Moody’s that is Baa and a S&P rating of BBB.
As an investor can you buy corporate bonds directly? The answer is yes if you know what steps to follow and how to do research. The first step that you need to follow is to locate possible companies and bonds. This research will help you determine what options are available in this sector and help you do thorough research.
The duration of zero coupon bond and the risk of default with the bond are closely linked. The longer the duration of a bond is the higher the risk of a default as well with many bonds. This risk correlation is the reason that bonds with a longer duration have a higher rate attached.
When it comes to the 2012 corporate bond offerings many investors compare US companies versus international choices. International companies may offer a more attractive rate in some cases but there may be differences in currencies and trading regulations. Foreign corporate bonds may face a higher risk of political instability
Finding the best corporate bonds to buy in 2012 may seem like a daunting task but it does not have to be. There are many quality bonds in this category to choose from no matter what your investing goals may be. One company that investors are interested in is Gilead Sciences, symbol GILD.
1. Current Interest Rates- Corporate bond prices are affected by the current interest rates. If the interest rates go up then the price of the bond will fall, and if the interest rates drop then the price of the bond will increase. The current interest rate depends on the economic situation as well as other factors.
What are the best high yield corporate bond funds? There are many of these funds to choose from, and each will have specific risks along with the higher yields. One of the top choices for many investors in this sector is the Vanguard High Yield Corporate Fund, symbol VWEHX, and this fund is under the management of Michael Hong.
The AAA corporate bonds list is much shorter today than it was even 15-20 years ago. Now there are currently only four bonds from US companies in this category that have the highest possible rating, and the credit rating of the USA has been lowered below AAA for the first time ever.
Current zero coupon bond rates can vary, sometimes significantly, depending on whether the bond is a Treasury bond, another municipal choice, or a corporate option. The duration of the bond also plays a large role in the rates offered by the bond. The current average rate for zero coupon treasury bonds is around 3% for a 20 year duration
Corporate bond yields will depend in some part on the ratings of the bond. Investors who choose this type of bond will compare a risk to reward ratio, and bonds which have a lower credit rating will usually offer higher yields to entice investors to take the risks involved. Investing in corporate bonds involves more risk than many municipal bond investments
1. A zero coupon bond calculator can help you determine the actual price of this type of bond. These bonds do not receive periodic interest payments and instead are sold at a discount from the face value. You will need to enter the duration of zero coupon bond into the calculator as well as the interest rate offered annually.
Who are the best performers in the corporate bond market over the last decade? There are many of these bonds on the market but not all of them perform well or offer high yields. Each investor will have specific criteria that is used to determine the best corporate bonds for their circumstances and situation, but one factor that is always evaluated is past performance.