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The pandemic season has been terrible. Worldwide economies have gone down tremendously. People are trying to use numerous ways to jumpstart the economy. One thing that has remained consistent during this time is trading bonds. Successful day bond traders are still making money every single day. Here’s how the bond market is the backbone of the economy. Bonds finance the government This goes to the very definition of bonds. By going into the bond market, you’re directly financing the government, helping it finance projects and day to day operations. You do benefit from the lucrative interest rates. However, you’re also...

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Including bonds in your portfolio is one of the best ways to add diversification and reduce the risks involved with volatile assets like stocks. Bonds provide a predictable rate of return and carry a higher return than saving in banks and certificates of deposits. And if held to maturity, you get back the principal.   There are different methods of investing in bonds. Your choice will depend on your risk tolerance. Like most investments, the more risk involved, the higher the return. Here are the top five. 1. Investing in Government Bonds These are the safest forms of bonds. They are issued...

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As a beginner, it’s easy to wrongly assume that bond investments involve simply finding the highest yielding bond. But it demands more. You have to assess the different types of bonds available and find one that meets your unique needs and whose risks you can handle. Next, find the best strategies to maximize your returns.  Here are the top four bond investing strategies beginners can use.  1. Passive Bond Management Strategy This is a buy-and-hold investment strategy that maximizes the potential return on investment. It involves holding it to maturity. You can reinvest the cash flow from the bond into the...

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You probably already know that bonds are less volatile than most investment assets in the market. But this does not mean you can invest blindly. There are potential risks that come with investing in debt instruments, but we will show you how to work through them.   Bonds can be classified as speculative or investment-grade bonds. A speculative-grade bond is viewed as not being of investment quality by a credit rating agency. This is because the agency rates the issuer poorly, and considers it to have a high risk of default. Due to the high risks involved, speculative-grade bonds carry a...

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If you think of bonds as an old fashioned way to invest your money, you couldn’t be any more wrong. With the unpredictable economic cycles experienced today, bonds provide a safety net. They are reliable, predictable, and an important component of a well-balanced investment portfolio.  Here are four reasons why bonds make an excellent choice of investment for both individuals and institutions.  1. More Predictable Returns While investment assets like stocks may carry higher returns especially in the long run, the returns are not predictable, especially in a recession. A bond is dependable and predictable, despite the current economic state. ...

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