Bond Basics: Conclusion
  1. Bond Basics: Introduction
  2. Bond Basics: What Are Bonds?
  3. Bond Basics: Characteristics
  4. Bond Basics: Yield, Price And Other Confusion
  5. Bond Basics: Different Types Of Bonds
  6. Bond Basics: How To Read A Bond Table
  7. Bond Basics: How Do I Buy Bonds?
  8. Bond Basics: Conclusion

Bond Basics: Conclusion

Now you know the basics of bonds. Not too complicated, is it? Here is a recap of what we discussed:

  • Bonds are just like IOUs. Buying a bond means you are lending out your money.
  • Bonds are also called fixed-income securities because the cash flow from them is fixed.
  • Stocks are equity; bonds are debt.
  • The key reason to purchase bonds is to diversify your portfolio.
  • The issuers of bonds are governments and corporations.
  • A bond is characterized by its face value, coupon rate, maturity and issuer.
  • Yield is the rate of return you get on a bond.
  • When price goes up, yield goes down, and vice versa.
  • When interest rates rise, the price of bonds in the market falls, and vice versa.
  • Bills, notes and bonds are all fixed-income securities classified by maturity.
  • Government bonds are the safest bonds, followed by municipal bonds, and then corporate bonds.
  • Bonds are not risk free. It's always possible - especially in the case of corporate bonds - for the borrower to default on the debt payments.
  • High-risk/high-yield bonds are known as junk bonds.
  • You can purchase most bonds through a brokerage or bank. If you are a U.S. citizen, you can buy government bonds through TreasuryDirect.
  • Often, brokers will not charge a commission to buy bonds but will mark up the price instead.

  1. Bond Basics: Introduction
  2. Bond Basics: What Are Bonds?
  3. Bond Basics: Characteristics
  4. Bond Basics: Yield, Price And Other Confusion
  5. Bond Basics: Different Types Of Bonds
  6. Bond Basics: How To Read A Bond Table
  7. Bond Basics: How Do I Buy Bonds?
  8. Bond Basics: Conclusion
RELATED TERMS
  1. Bond

    A debt investment in which an investor loans money to an entity ...
  2. Discount Bond

    A bond that is issued for less than its par (or face) value, ...
  3. U.S. Savings Bonds

    A U.S. government savings bond that offers a fixed rate of interest ...
  4. Dollar Price

    The percentage of par, or face value, at which a bond is quoted. ...
  5. Extendable Bond

    A long-term debt security that includes an option to lengthen ...
  6. Bond Resolution

    1. A document used with government bonds, especially general ...
RELATED FAQS
  1. What determines the price of a bond in the open market?

    Learn more about some of the factors that influence the valuation of bonds on the open market, and why bond prices and yields ... Read Answer >>
  2. What forms of debt security are available for the average investor?

    Discover the various different types of debt securities, issued by government entities or corporations, that are available ... Read Answer >>
  3. Do long-term bonds have a greater interest rate risk than short-term bonds?

    The answer to this question lies in the fixed income nature of bonds and debentures, often referred to together simply as ... Read Answer >>
  4. Which factors most influence fixed income securities?

    Learn about the main factors that impact the price of fixed income securities, and understand the various types of risk associated ... Read Answer >>
  5. Why is my bond worth less than face value?

    Find out how bonds can be issued or traded for less than their listed face values, and learn what causes bond prices to fluctuate ... Read Answer >>
  6. What causes a bond's price to rise?

    Learn about factors that influence the price of a bond, such as interest rate changes, credit rating, yield and overall market ... Read Answer >>

You May Also Like

Trading Center