1. Money

Bonds 101

Bonds are among the least understood investment vehicles in the world. But there's no need for investors to remain in the dark. Here's where you'll learn the basics of the bond market, how debt securities are priced, whether bonds make sense for your portfolio, just how safe -- or risky -- bonds may be, and just what exactly, is a yield curve.

Bonds 101
Your resource for getting started in bonds - learn how bonds work, what the different yield and return figures mean, and whether bonds are right for you.

What Is a Bond? Past the Complicated Lingo Is a Familiar Concept
Bonds are a mystery to many investors. But there's no need for confusion. Once you get past the jargon of yield curves, maturities and Aaa ratings, you'll find a simple and familiar concept. A bond, after all, is nothing more than a loan.

Why Invest in Bonds?
Bonds don't receive the same attention that is lavished on stocks, but there are several benefits to investing in bonds, including steady income, diversification, principal protection, and potential tax benefits. Find out how bonds may help you achieve your financial goals.

How to Balance Risk and Return in Your Investment Portfolio
Understanding the relationship between risk and return in the financial markets: when deciding where to invest your money, it’s always important to remember that with higher return potential comes higher risk.

Assessing Your Risk Tolerance
One of the most important steps for novice investors is accurately gauging your risk tolerance. This guide will help you determine that level of risk that's appropriate for you.

The Relationship Between Risk and Yield in the Bond Market
A bond's yield is often an indicator of its risk - the higher the yield, the higher the risk; the lower the yield, the lower the risk. Find out why this is, and why investors should never pick a bond or bond fund solely on the basis of its yield.

How to Allocate Your Investments Among Stocks, Bonds, and Cash
What factors should you consider in determining your appropriate allocation to stocks, bonds, and cash?

The Right and Wrong Reasons to Shift Your Asset Allocation
Investors cost themselves performance by market timing rather than developing a sensible asset allocation. How can you avoid falling into this trap?

The Basics of of Portfolio Rebalancing
Learn the basics of why periodic portfolio rebalancing can keep you on track for your investment goals.

12 Types of Bonds to Know
Learn about 12 types of bonds that appear most frequently in investors' fixed-income portfolios, from low-risk options such as savings bonds and U.S. Treasuries to higher-risk investments such as high yield bonds and emerging market debt. Find out the basics of each of the 12 types of bonds, and get links to more in-depth information.

Top 10 Things to Know About Bonds
If you’re new to the world of bonds, it’s easy to be intimidated. Bond investing can be filled with unusual lingo, strange concepts and a lot more talk about math and economics than you’ll find at the local discount stock broker’s office. But don’t be discouraged. Bonds aren’t as mysterious as they may appear.

Bond Basics: Issue Size, Issue Date, Maturity Value, Coupon, Yield to Maturity
Learn basic bond definitions: what are issue size, issue date, maturity value, coupon, and yield to maturity. Also, what is the difference between coupon and yield to maturity?

Why Do Bond Prices and Yields Move in Opposite Directions?
Get the plain-English explanation of why bond prices and yields move in opposite directions. Why do bond prices rise when yields fall, and vice versa?

The Difference between Yield and Total Return
There's more to a bond fund's return than simply its yield. Investors must also consider the fund’s total return, which is the combination of yield and the return provided by principal fluctuation. Learn the difference between yield and total return, and which measure is more useful in assesing bond funds.

The Difference Between Coupon and Yield to Maturity
One of the most important things for bond investors to understand is the difference between coupon and yield. Coupon tells you what the bond paid when it was issued, but the yield – or “yield to maturity” – tells you how much you will be paid in the future. Learn more about the difference between a bond's coupon and its yield to maturity.

The Difference Between Yield to Call and Yield to Worst
Learn the difference between a bond's yield to call and yield to worst, and how these relate to the bond's yield to maturity.

The Difference Between Real Return and Real Yield
Learn the meanings of real return, nominal return, and real yield, and how understanding these concepts can help you make better investment decisions.

Why Low Yields Pressure Bond Market Returns
Low bond yields don't just equate to lower income for investors; they also indicate that bonds now have less long-term total return potential.

Premium Bonds and Discount Bonds: Definition and Explanation
Learn the basic definitions of premium bonds and discount bonds, why discount bond aren't necessarily a value, and why premium bonds shouldn't be thought of as “expensive”.

Secured Bonds vs. Unsecured Bonds
A simple explanation of the difference between secured bonds and unsecured bonds, including their risk and return characteristics.

What Are Bond Credit Ratings?
Bond credit ratings provide a guide the strength of the issuer’s finances and its future prospects – and allow investors to gain a sense of how likely a bond is to default. Learn more about bond credit ratings, and what each credit tier – from AAA to D – can tell you about an individual bond.

Bond Upgrade and Downgrade Definition
Learn the basic definition of bond upgrades and downgrades, and what changes to a bond’s credit rating may mean for your portfolio.

Understanding Yield Curves: The Spread is the Key for Investors
A yield curve is simple representation of the relationship between the interest rate that a bond pays and when that bond matures. Learning how to read a yield curve -- and knowing the significance of a flattening or inverted yield curve as well as how to calculate the spread -- is a crucial skill for fixed-income investors.

Credit Risk vs. Interest Rate Risk
Bonds are often classified as “low risk” or “high risk,” but this is only half of the story. There are actually two kinds of risk: interest rate risk and credit risk. These are two distinct types of risk that can have a very different impact on various asset classes within the bond market. Find out interest rate risk and credit risk will affect...

The Risks of Bond Investing: Understanding Inflation, Reinvestment Dangers
Bonds are among the safest investments in the world. But no investment is entirely risk free. In fact, fixed-income investing has its own particular forms of risk: inflation, reinvestment, default, downgrade

The Top 10 Mistakes by Bond Investors
Make the most from your fixed income investments by avoiding these ten common mistakes made by bond investors.

Bonds and the Economy
Economic trends are one the key drivers of bond market performance, but the economy affects different types of bonds in different ways. Learn more about the links between bonds and the economy.

What is a Yield Spread?
The term “yield spread” is one that you may see used quite frequently – and with good reason. The yield spread is one of the key metrics that bond investors can use to gauge how expensive or cheap a particular bond – or group of bonds – might be. Learn more about yield spreads and how they can help you make better investment decisions.

The Impact of Inflation on Bonds
An easy-to-read explanation of how changes in inflation will affect your bond investments.

What Are Zero-Coupon Bonds and "Strips" ?
Zero-Coupon Bonds are sold at a deep discount to their face value. In many cases, interest is compounded and paid at maturity rather than during the life of the bond. In other cases, a financial institution "strips" the interest payment from a fixed-income investment and resells it as a zero coupon.

The Difference Between Stocks and Bonds
Investors are always told to diversify their portfolios between stocks and bonds, but what’s the difference between the two types of investments? Here, we look at the difference between stocks and bonds on the most fundamental level.

Why Do Stocks Perform Better than Bonds Over Time?

The fact that bonds' upside is capped, whereas stocks' upside potential is open-ended, is the key driver of stocks' long-term return advantage.

What is a Basis Point?
“Basis point” is a phrase that frequently appears in the financial media and mutual fund reports. Find out what the term basis point means, and how it's typically used.

Bond Funds in Your 401(k)
Should the bond market's fluctuations affect your 401(k) investment strategy? CBS MarketWatch takes a look.

How to Buy Individual Bonds
MarketAxess is an electronic trading platform for many types of bonds. Find out more about this growing business and how it may change the way you invest.

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