Bonds 101
By Thomas Kenny, About.com Guide
This is 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.
Getting Started
The bond market may seem confusing at first, but it's easy to get started if you begin with these basics.
- What is a Bond?
- Ten Things to Know About Bonds
- Why Invest in Bonds?
- The Easiest Ways to Invest in Bonds
- The Differences Between Stocks and Bonds
- Using Bonds for Diversification
- The Relationship Between Risk and Yield in the Bond Market
- Why Do Bond Prices and Yields Move in Opposite Directions?
- Should Young People Invest in Bonds?
- The Top 10 Mistakes by Bond Investors
Understanding Bond Terminology
The language of bonds might be intimidating to beginners, but this guide can help you begin to understand the jargon - and learn some key concepts in the process.
- Bond Basics: Issue Size, Issue Date, Maturity Value, Coupon, Yield to Maturity
- The Difference Between Coupon and Yield to Maturity
- The Difference between Yield and Total Return
- The Difference Between Yield to Call and Yield to Worst
- The Yield Curve Explained
- What Is “Real Return” and “Real Yield”?
- The Different Types of Fund Yields
- What is a “Yield Spread”?
- What are "Premium" Bonds and "Discount" Bonds?
- Credit Risk vs. Interest Rate Risk
- What Bond Credit Ratings Tell Us
- The Meaning of "Upgrade" and "Downgrade"
Investing in Bonds
If you have already decided that bonds are right for you, here are some resources to help you get started down the correct path.