Bonds: Most Popular Articles
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 to maturity tells you how much you will be paid in the future.
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Find out the differences among the three types of government bonds: Treasury bills, Treasury notes, and Treasury bonds.
fiscal cliff us economy terms. Bonds.
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?
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”.
When will the Fed raise rates? That's the question on all investors' minds given the role Fed policy has played in the performance of both stocks and bonds. Get the layperson's explanation of why rates are so low, what it would take for the Fed to raise rates, and what higher rates would mean for your portfolio.
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.
The European debt crisis is the shorthand term for the region's struggle to pay its debts. Here is a Q&A to help familiarize you with the basics of, and outlook for, the European debt crisis.
China owns a large, and growing, percentage of the United States' debt. How large is China's position in U.S. Treasuries, and does it matter?
Find out what a. Bonds.
Find out how bond market performance compares to stocks in the past ten years, and learn which segments of the bond market provided the best returns. The historical bond market performance data tells an interesting story about the importance of bonds in portfolio diversification.
Year-by-year return data: the annual total return for stocks and bonds in each calendar year from 1980 through 2013. Which delivered better performance?
Bonds can be either secured or unsecured. See the definition, differences, and risk and yield characteristics of these two types of bonds.
An easy-to-understand guide to the 2014 bond market outlook, with expert opinions and a summary of the factors likely to impact bond returns in 2014.
Learn basic bond definitions: what are issue size, issue date, maturity value, coupon, and yield to maturity.
An easy-to-read explanation of how changes in inflation will affect your bond investments.
What is a bullet strategy in bond investing? Find out the definition of bullet strategy, and how it compares to the laddering and barbell strategies.
The United States large and growing national debt has reached worrisome levels. How does the country's debt affect the outlook for U.S. Treasuries?
See the long-term, historical yield charts for 2-year, 5-year, and 10-year U.S. Treasuries, together with a brief description of the forces influencing Treasuries' yield movements over time.
An easy-to-understand explanation of the difference between a distribution yield and an SEC yield. Which yield calculation should you use, and why does it matter?
The differences between short-term, intermediate-term, and long-term bond funds: risks, returns, and determining what mix is right for you.
The yield spread is a key metric that bond investors can use to gauge how expensive or cheap a particular bond, or group of bonds, might be. Learn how understanding yield spreads can help you make better investment decisions.
Find out what types of bonds can deliver returns when prevailing bond yields are dropping, and which may be hurt.
Learn how to determine which investment is more appropriate for your objectives: short-term bond funds or money market funds.
Learn about 12 types of bonds, from low-risk options such as savings bonds to higher-risk investments such as high yield and emerging market bonds.
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.
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, including inflation risk, reinvestment risk, default risk and downgrade risk.
A look at these bonds whose yields adjust with changes in prevailing interest rates;their benefits and pitfalls;and the best way to invest in them.
A definition and explanation of the Federal Reserve's quantitative easing policy, the differences between QE1, QE2, and QE3, and how quantitative easing affects the financial markets.
Get the list of all bond mutual funds ranked 4-Star and 5-Star by Morningstar.
How do fiscal policy and monetary policy differ, and what impact can they have on your investments?
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.
Investors who need to keep their money safe have a wealth of options to consider in the world of bonds and bond and mutual funds. Learn about some of the lowest-risk options in bonds, and whether low-risk bonds are right for you.
What currency hedging is, how many managers employ currency hedging strategies, and how hedging can affect the performance of bond funds. What's the difference between hedged and unhedged funds?
High Yield Bonds 2014 Outlook: What needs to happen for high yield bonds to keep outperforming in 2014, and what risk factors could derail the rally?
Convertible bonds are bonds that are issued by corporations and that can be converted to shares of the issuing company's stock at the bondholder's discretion. Convertible bonds typically offer higher yields than common stock, but lower yields than straight corporate bonds. Learn more about the basics of convertible bonds.
With the likelihood rising that bond yields will move higher in the years ahead, here are six ways to protect your portfolio from rising rates.
Learn about how commercial mortgage-backed securities (CMBS) work, and how individual investors can participate in this market sement.
Knowing how to calculate the tax equivalent yield on municipal bonds is a key element of determining whether munis or taxable bonds are right for you.
Careers in bond trading can be enormously rewarding from a financial perspective. Competition for these jobs at the giant investment banks and other financial institutions is fierce. And the markets modernize, the floor traders of old are being replaced by a new breed of trader skilled in math and computer programming.
The complete, updated list of bond exchange-traded funds (ETFs), sorted by category.
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 value of your investments.
Asset backed securities, or ABS: find out the risks, return characteristics, history, and definition, and how they can play a role in your portfolio.
The 2014 outlook for corporate bonds: what factors will drive performance in 2014? See the expected returns, key risks, and one potential opportunity.
High yield bonds may be in for an extended period of subpar returns, but talk of an outright crash in the high yield bond market is mostly overblown hype.
2013 Bond Market Performance Review: A comprehensive summary of 2013 bond market returns including key events and performance drivers for each sector.
Those who are looking for ways to generate investment income through dividends often allocate a portion of their portfolios to utility stocks. Find out the performance characteristics and risks associated with investing in utilities.
Fed policy explained: An up-to-date rundown on all aspects of current Federal Reserve policy, including interest rates and quantitative easing.
Deflation vs. disinflation: the difference between the two, and what each means for the economy and financial market performance.
Investors may be worried about the possibility of interest rate increases by the U.S. Federal Reserve, but one group stands to win when rates rise: savers.
Treasury Inflation-Protected Securities (TIPS) can be used to calculate inflation expectations using some very simple math. Find out how to comparing TIPS and U.S. Treasuries can tell you where the market sees future inflation.
The highest credit rating, AAA, is typically reserved for government bonds, but four U.S. corporations are also assigned this gold standard of good credit: Microsoft, Johnson & Johnson, Automatic Data Processing, and Exxon Mobil. Learn more about the Big 4 of AAA-rated U.S. corporations, and why they're rated more highly than U.S. Treasuries.
Which bond ETFs will be the best performers in 2014? Three bond ETFs with high yields and below-average interest-rate risk could be top picks for 2014.
See how much of the United States' debt is owned by foreign countries, what countries own the most U.S. debt, and how their holdings have changed in the past year.
Find out how the investment strategies that will help you survive - and perhaps even profit from - a bond bear market.
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Find out what a bond default is, what occurs when a bond defaults, how frequently this occurs, and how a default can affect the performance of individual bonds and bond funds.
High-dividend stocks are one of the most popular option for those who need investment income but who don't want to invest their entire portfolio in bonds. Find out more about the best strategies for investing in dividend-paying stocks.
Operation Twist was a program conducted by the U.S. Federal Reserve to help stimulate the economy. Learn more about the basics of Operation Twist and its impact on the U.S. bond market.
If you're primary goal in investing is to not lose money, consider buying U.S. government debt. Treasuries are backed by the
Learn about the risks and historical performance of high yield bonds, their role in your portfolio, and the various ways to invest in high yield bonds.
There are two major categories of municipal bonds: general obligation bonds and revenue bonds. Here is the easy-to-understand explanation of the difference between general obligation and revenue bonds.
Money market funds are a popular and safe place for investors to keep cash for the short term. These investment vehicles offer both security and liquidity. But the relatively poor returns offered by this class of mutual funds make them ill-suited for long-term investment.
Buying individual corporate bonds is a complex endeavor. It takes more sophistication and more research than buying a share of stock. Here are some of the key things to consider.
Learn about the risks and historical performance of corporate bonds, their role in your portfolio, and the various ways to invest in corporate bonds.
Economic trends are a key driver of bond market performance, but the economy affects different types of bonds in different ways. Learn more about the link between bonds and the economy.
Senior loans, also referred to as leveraged loans or syndicated bank loans, offer diversification and attractive yields, but also a unique set of risks. Are senior loans right for you?
Strength or weakness in the U.S. dollar can have a major impact on the performance of global and international mutual funds. Learn how currency movements can help or hurt the value of your international investments.
The federal funds rate – typically referred to as the fed funds rate – is the rate at which banks with balances on held at the Federal Reserve borrow from one another an overnight basis. How does the federal funds rate work, and what is its impact on the economy?
Municipal bonds underperformed in 2013, but three important factors indicate that the municipal bond outlook is set to improve considerably in 2014.
Learn the meanings of real return, nominal return, and real yield, and how understanding these concepts can help you make better investment decisions.
Bond index funds are a simple and cost-effective way to invest in bonds. Learn about the key benefits and risks of bond index funds
Historical performance for high yield bonds: find out the year-by-year total returns for high yield bonds vs. both stocks and investment-grade bonds.
There are many benefits to investing in bonds, including income, diversification, principal protection, and potential tax savings. How can bonds help you achieve your goals?
Yields on government bonds and short-term investments have fallen to extremely low levels in recent years, punishing those who are investing for income. Find out why yields are so low, and what you can do about it.
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.
Find out how TIPS pay interest, the mechanices of TIPS' principal adjustment, and the potential risks of investing in TIPS.
Bonds may not seem to be the natural choice for an IRA, but they play a key role in retirement planning. What types of bonds are the best fit for IRAs?
The newest addition to the U.S. bond market is similar to the asset-backed securities that led to the credit crisis, but supposed to be much safer.
Target maturity bond funds can help investors bridge the gap between the diversification of bond funds and the greater certainty of bond ladders.
Learn more about the risks of corporate bonds, and the difference between the risk of individual corporate bonds versus corporate bond funds and ETFs.
For many investors, the idea of earning tax-free returns makes the purchase of a muni bond seem like a no-brainer. But munis aren't for everyone. Unless you're in the right tax bracket, owning a muni can be a very bad move. So let's answer the question: Should you buy municipal bonds?
A yield curve is a 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.
For income investors, Master Limited Partnerships, or MLPs, are a potential source of attractive yields. Learn about the role MLPs can play in your portfolio.
What is duration, and how does duration affect the performance of your bond fund?
The 2014 Bond Market Outlook is now available here.
Do you own too many bond funds? For most investors, it's easy to achieve your objectives with anywhere from one to three bond funds. Find out how to avoid confusing quantity with diversification.
U.S. Treasuries are generally considered one of the safest – if not the safest – investments in the global financial markets. While this is true, it depends how you invest. If you own Treasuries via mutual funds or ETFs, or if you sell them before they mature, they can in fact be quite risky. Find out more about the potential risks of U.S. Treasury bills, notes, and bonds.
How do interest rates, the health of issuing corporations, and investors' attitude toward risk work together to affect the returns of corporate bonds?
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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.
Dividend-paying stocks with high yields can seem like an outstanding investment at first glance. However, the highest-yielding stocks can also come with a danger – that the dividend is unsafe or may not be what it appears on the surface. But how can you tell the difference between a legitimate high yield and one that’s too good to be true?
Find out why TIPS yields are negative, what this tells us about the economy, and why investors are continuing to buy TIPS despite their negative yield.
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
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.
TreasuryDirect is one of the best resources for investors who want to purchase U.S. government bonds, or who simply want to learn more about how the government manages its debt. Find out more about how TreasuryDirect can help you manage your bond investments.
Second Quarter 2014 Bond Market Returns: see performance data, key events, drivers of outperformance for corporate and high yield bonds, plus a second half outlook.
Green Bond primer: What are green bonds, who issues them, and how can individuals invest in these new securities?
Somewhere in early 2007, one of the more complex and controversial corners of the bond world began to unravel. By March of that year, losses in the collateralized debt obligations (CDOs) market were spreading -- crushing high-risk hedge funds and spreading fear through the fixed-income world. The credit crisis had begun.
Some bonds have an unusual feature that allows the issuer to
Apple stock vs. Apple bonds: While Apple's longer-term bonds offer a higher yield than its stock, AAPL stock is the better option by a number of measures.
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A simple explanation of the debt ceiling debate and crisis: Find out how the debt ceiling works, and how the debate could impact financial market performance.
Learn the basic definition of bond upgrades and downgrades, and what changes to a bond’s credit rating may mean for your portfolio.
Long-term bond funds can deliver outstanding returns when interest rates are falling, but they also carry outsized risk. Learn more about the benefits and risks of investing in long-term bond funds.
Bonds are among the safest investments available. And as a general rule, mutual funds are the safest way to invest in bonds. But that doesn't mean you should jump right in. Here are a few items to consider before you buy a bond fund.
Is there a bond bubble? Find out what the bond bubble is and what would a bursting bubble might mean for your portfolio.
Reinvestment risk, a challenge all investors face when bond yields are falling, is the risk that future cash flows will need to be reinvested in lower-yielding securities. Learn more about what reinvestment risk is, and how you can avoid it.
Emerging market bonds 2014 outlook: Find out the expected returns, the key risks, and the outlook for local-currency bonds and emerging corporates.
What circumstances regarding the economy, investor sentiment, and corporations' financial health typically fuel the best returns for high yield bonds?
Most areas of the bond market moved in lockstep during 2013, but two - high yield bonds and senior loans - stood out.
Six investments to consider - and three to avoid - for a bond bear market.
Learn what the debt-to-GDP ratio is, why a manageable ratio is essential, and how the debt-to-GDP ratio can affect bond yields.
Find out how the taxes on mutual funds' dividend income and capital gains differ, and why you have to pay a final capital gains tax when you sell a fund, even though you have been paying a capital gains tax each year.
High yield municipal bonds offer higher income than investment-grade muni bonds, but they also feature greater risks. Should you own high yield munis in your portfolio?
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.
Find out why using a taxable account to buy a mutual fund before it makes a distribution can actually cost you money.
A bond is a loan. So the first question to ask before you buy a bond is the same question you'd ask before you loaned money to your brother-in-law:
With the Federal Reserve moving closer to raising interest rates, should you buy U.S. Treasuries right now? It depends on whether you're investing via funds or individual bonds.
A simple explanation of the Fed dot plot and how it affects the markets. The dot plot provides insight into Fed policy, but it can also be misleading.
Core funds are so named since the idea is that if investors owned only one investment grade bond fund in their portfolio, the core fund could essentially cover all the bases. But do core bond funds truly help investors maximize thier diversification?
Learn about the risks and historical performance of mortgage-backed securities, their role in your portfolio, and the various ways to invest in mortgage-backed securities (MBS).
Actively managed vs. passively managed bond funds: the key differences between active and passive management, and which has delivered better returns.
China is the largest buyer of U.S. Treasuries, but changes in China's economy may change that. What are the implications for the U.S. bond market?
Numerous studies have shown that mutual funds and ETFs with the lowest expense ratios deliver the best long-term performance. Find out why low expense ratios are so important to fund returns, and how you can benefit from owning low-fee funds.
Is a bond market crash in the cards? While an era of lower returns may be upon us, there are six reasons why a market crash is unlikely.
Learn what the default rate is, how likely bonds in certain categories are likely to default, and how investors can minimize their exposure to default risk.
The consensus expectation is that the first rate increases by the U.S. Federal Reserve will cause a bond bear market, but these fears may be exaggerated.
The highest yielding bond funds may provide above-average income, but they also come with above-average risk. Are the highest-yielding bond funds are right for you, or are you better off in a safer investment?
If taxes are a concern, but you don't have at least $100,000 to invest, you should consider buying a municipal bond fund. These mutual funds offer the same tax-free advantages of municipal bonds while also offering diversification.
Morningstar star ratings can help you choose mutual funds, but they have three important limitations. Why even a 5-star fund may not be right for you.
: Selling bonds is a complex endeavor. There are millions and millions of dollars at stake even in the
Leveraged bond funds are are investment vehicles that allow experienced investors to achieve daily returns two or three times that of a particular asset class. Find out how leveraged bond funds work, and whether these products are right for you.
Hedged high yield bonds ETFs sound good on paper, but there are many reasons why a hedged approach is an inefficient way to invest in high yield bonds.
Find out how the Federal Reserve's discount rate works, the impact of the discount rate on the economy, and how the discount rate differs from the fed funds rate.
Bond funds aren't entirely risk-free. What are the risks of bond funds, and how does this risk compare to that of investing in individual bonds? Learn more to help you make the decision of whether to invest in individual bonds or bond funds.
What factors should you consider in determining your appropriate allocation to stocks, bonds, and cash?
The historical performance numbers for short-, intermediate- and long-term bonds. Which category is poised for the best returns in the coming years?
The complete, updated list of municipal bond ETFs, sorted by category. An overview of index funds and municipal bond ETFs focused on the high-yield, California, and New York categories.
Our pick for the best bond ETF for the next ten years is the Emerging Market High Yield Bond ETF. Find out why the HYEM ETF stands out from the crowd.
Dividend-paying stocks offer more than just income – if dividends are reinvested, they represent a substantial portion of stocks’ long-term total return. Find out how much of stocks' total return is generated by dividends, and whether high-dividend stocks are right for you.
Investors who want to invest in emerging market bonds have two options: dollar-denominated bonds and bonds denominated in local currencies. Find out what local currency emerging market bonds are and whether this asset class is right for you.
When the Fed raised short-term interest rates in 1994, short-term bond funds plunged. Could history repeat itself once the Fed starts raising rates?
Find out which types of bonds provide helpful diversification when stocks are in a bear market, and which are most likely to underperfom.
The fact that bonds' upside is capped, whereas stocks' upside potential is open-ended, is the key driver of stocks' long-term return advantage.
Bonds have surged thus far in 2014, confounding the experts' negative expectations.
Learn more about the risks of money market funds, and whether investors are correct in seeing money market funds as ultra-safe, low risk savings vehicles.
Investors often use past performance as their main criterion for choosing a bond fund, but there's much more to picking a fund than simply looking at its historical returns.