Bonds Investing

Credit rating agencies rate most of the larger companies and municipalities for their credit worthiness. Credit rating for bonds.

Corporate bonds generally pay the highest interest rates and are usually available in $1,000 or $5,000 denominations with maturities up to 30 years.

An alternative to treasury bonds are municipal bonds which are exempt from federal taxes. These bonds are popular with investors seeking to reduce their tax burden.

The U.S. Federal Treasury issues bonds with various maturities ranging from four weeks up to 30 years and come with the full faith and credit of the U.S. government.

Investors who are new to bonds tend to be familiar with the term ‘Treasury Bonds’ as these bonds are widely covered by the financial press.

The speculative strategies with bonds include Convertible Bond Hedge tactics and Bankruptcy Bond tactics – Popular with hedge funds and experienced investors.

The primary purpose of bonds is to provide an income, but there’s a wide variety of bond strategies that profit from capital gains.

The main theme with income investing is to receive the coupon payments until maturity and to preserve capital.

Investing in bonds is a popular alternative to investing in the stock market for many new investors. A bond portfolio can still underperform.