Bonds : Bonds
The bond market is made up of of securities that are fundamentally loans from investors to borrowers. These borrowers can be any person from organizations to companies to our governments themselves. The sale of bonds are not limited to just individuals but see a lot of activity from insurance companies, pensions funds and even banks.
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 recognized as fixed income securities mainly because the interest rate offered is fixed and acknowledged to interested parties when the bond is up for sale.
Why trade bonds?. Bonds have one very well-defined advantage over the stock or the forex trading market. It is the purchase of debt and not equity when you purchase bonds. Should tragedy ever befall the bond issuer, say a bankruptcy, creditors (debt-holders) get paid before shareholders do.
The bond market is usually a lot more reliable than other markets are. That doesn't mean there are no risks in the bonds market. There always are. But there are ordinarily numerous cautious bonds available for purchase. This is because profits are traded off with added security. Due to its conservative personality, the bonds market is routinely ignored.
America is the major issuer of bonds with slightly more than 40% of the intercontinental bond market while Japan comes in second. Some 80 trillion US Dollars in bonds we realized in 2008 making the bond market far smaller than either the forex market or the stock exchange market.
There are some disadvantages when it comes to bonds however. Only those that invest big amounts see big profits. There is always the risk of not being able to sell your bond when the time is suitable. The forex market on the other hand enables us to sell with comparative ease. Lastly, bonds are not traded the way currencies and shares are.
To summarize, bonds are still a safe investment that should be considered by the Malaysian public. Those of you in Malaysia that are on the cautious side should feel comfortable with the bonds market. Just don't look ahead to pay-outs like you would get in the stock market. - 23310
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 recognized as fixed income securities mainly because the interest rate offered is fixed and acknowledged to interested parties when the bond is up for sale.
Why trade bonds?. Bonds have one very well-defined advantage over the stock or the forex trading market. It is the purchase of debt and not equity when you purchase bonds. Should tragedy ever befall the bond issuer, say a bankruptcy, creditors (debt-holders) get paid before shareholders do.
The bond market is usually a lot more reliable than other markets are. That doesn't mean there are no risks in the bonds market. There always are. But there are ordinarily numerous cautious bonds available for purchase. This is because profits are traded off with added security. Due to its conservative personality, the bonds market is routinely ignored.
America is the major issuer of bonds with slightly more than 40% of the intercontinental bond market while Japan comes in second. Some 80 trillion US Dollars in bonds we realized in 2008 making the bond market far smaller than either the forex market or the stock exchange market.
There are some disadvantages when it comes to bonds however. Only those that invest big amounts see big profits. There is always the risk of not being able to sell your bond when the time is suitable. The forex market on the other hand enables us to sell with comparative ease. Lastly, bonds are not traded the way currencies and shares are.
To summarize, bonds are still a safe investment that should be considered by the Malaysian public. Those of you in Malaysia that are on the cautious side should feel comfortable with the bonds market. Just don't look ahead to pay-outs like you would get in the stock market. - 23310
About the Author:
Click here for more reading on Bonds and Forex Trading in the links mentioned. The Author has been investing online for over 7 years. When Prema De Silva is not trading the currency markets, she expands her knowledge on online investing and oversees the operation of a popular stock Trading trading website.
posted by Mr. Forex at
3:54 AM
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