Personal Finance & Money Stack Exchange
Personal Finance & Money Stack Exchange

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.

In finance, a bond is a negotiable certificate that acknowledges the indebtedness of the bond issuer to the holder.

Bonds are issued by public authorities, credit institutions, companies and supranational institutions in the primary markets.

Bond (finance) - From Wikipedia

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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% interest - so if I get a loan to use to buy the bond,…
Benubird
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Why would I ever put my money into a savings account that returns less than the current inflation rate?

I like a safe investment as much as the next guy. But can anyone give me a good argument on why I should invest in a bond or a savings account that returns less than inflation? It seems to me that I am guaranteeing myself to lose, if I do that.…
DevShark
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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 is lowered from its face value and is considered…
Wapiti
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Opportunity to buy Illinois bonds that can never default?

Today Illinois bonds were downgraded to 1 above junk. The article. Citation from article: Despite the lack of a budget, Illinois has continued to cover payments due on its bonds, and, like other states, has no ability to resort to bankruptcy to…
Tony
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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 stocks? Certainly they didn't use their emergency…
Ken - Enough about Monica
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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 bonds pay less interest than short term ones. I'm…
JoJo
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Why would I not buy a bond for less than face value?

The way I understand it is that if you own a bond at maturity you will get the face value of the bond at that time. So if you can purchase a bond at $80 which has a face value of $100 why would I not sell everything I own and put all that money…
Aequitas
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Bought agency bond (FANNIE MAE 0% 04/08/2027), now what?

I just bought 15 of these for $10,677 through my brokerage firm. It says 3.3% interest. I have no idea how this works. But I trust it is gov bond and will pay 3.3%. Can anyone explain how it works? Will it pay interest annually or every 6…
Tony
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When can you skip bonds for retirement?

Conventional wisdom holds that as one approaches retirement, one should transition from holding mostly risky investments (stocks and mutual funds) towards holding more conservative investments (bonds). This makes sense, since it protects you from a…
codeMonkey
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How would bonds fare if interest rates rose?

The first thing I learned about bonds is that when interest rates rise, the price of existing bonds tends to fall. Unfortunately, I didn't learn much else about bonds. So I have a couple questions about them. If interest rates rise I'm sure it will…
Stainsor
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How do you short US Treasuries?

As the US government continues to issue record levels of debt, I don't think it can continue to sell that debt at 2 - 3% interest. It will face the simple supply/demand law of economics — the more supply of an item, the less valuable each item is…
Muro
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What is the best way to invest short term without losing principal?

My wife and I were planning to buy a house this year, but the plan fell through, so right now we are sitting on the money that we saved towards down payment and renovations (prior to now money was in the Money markets, Savings & CDs). We decided to…
konung
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Why would I buy a bond with a negative yield?

The only reason that I can think of is because I expect the bond to appreciate in price thus offsetting the loss in yield. I could still end up with less money than I started with, if I hold the bond until maturity. Ultimately, the only scenario…
Ellie K
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Inflation-linked bonds — what's the catch?

This the question Why is there a discrepancy between current inflation rate and I bond rate in the US? I have learned that, at least in the USA, there exist bonds where the yield is guaranteed to be not less than inflation. That sounds too good to…
gerrit
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What is a good asset allocation for a 25 year old?

I have a mid-sized portfolio (under $100K). And am currently in 100% stocks. I have seen some advice being given that states 80/20 bonds will yield similar returns as 100% stocks with less volatility.
Sheehan Alam
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