Bonds: Most Popular Articles
Find out the differences among the three types of government bonds: Treasury bills, Treasury notes, and Treasury bonds.
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.
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?
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.
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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”.
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 European debt crisis, which began in late 2009, is the shorthand term for the region’s struggle to pay the debts it has built up in recent decades. This is one of most important issues facing the world economy, but it is also one of the hardest to understand. Here is a Q&A to help familiarize you with the basics of, and outlook for, the European debt crisis.
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.
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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?
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.
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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 explanation of the difference between a distribution yield and an SEC yield. Which yield calculation should you use, and why does it matter?
Learn basic bond definitions: what are issue size, issue date, maturity value, coupon, and yield to maturity.
Learn how to determine which investment is more appropriate for your objectives: short-term bond funds or money market funds.
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.
The differences between short-term, intermediate-term, and long-term bond funds: risks, returns, and determining what mix is right for you.
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.
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.
Get the list of all bond mutual funds ranked 4-Star and 5-Star by Morningstar.
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?
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.
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.
An easy-to-read explanation of how changes in inflation will affect your bond investments.
Find out what types of bonds can deliver returns when prevailing bond yields are dropping, and which may be hurt.
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 about how commercial mortgage-backed securities (CMBS) work, and how individual investors can participate in this market sement.
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.
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.
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.
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.
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.
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.
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.
The complete, updated list of bond exchange-traded funds (ETFs), sorted by category.
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.
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.
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.
How do fiscal policy and monetary policy differ, and what impact can they have on your investments?
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?
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.
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.
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.
Green Bond primer: What are green bonds, who issues them, and how can individuals invest in these new securities?
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.
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.
The 2014 outlook for corporate bonds: what factors will drive performance in 2014? See the expected returns, key risks, and one potential opportunity.
2013 Bond Market Performance Review: A comprehensive summary of 2013 bond market returns including key events and performance drivers for each sector.
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.
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.
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?
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.
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?
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?
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
Asset backed securities, or ABS: find out the risks, return characteristics, history, and definition, and how they can play a role in your portfolio.
Find out how TIPS pay interest, the mechanices of TIPS' principal adjustment, and the potential risks of investing in TIPS.
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.
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.
Some bonds have an unusual feature that allows the issuer to
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.
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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.
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?
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.
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.
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.
Municipal bonds underperformed in 2013, but three important factors indicate that the municipal bond outlook is set to improve considerably in 2014.
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.
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.
An up-to-date rundown on all aspects of current Federal Reserve policy regarding interest rates and quantitative easing.
The 2014 Bond Market Outlook is now available here.
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.
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).
Learn about the risks and historical performance of corporate bonds, their role in your portfolio, and the various ways to invest in corporate bonds.
Deflation vs. disinflation: the difference between the two, and what each means for the economy and financial market performance.
What is duration, and how does duration affect the performance of your bond fund?
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.
If you're primary goal in investing is to not lose money, consider buying U.S. government debt. Treasuries are backed by the
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.
How do interest rates, the health of issuing corporations, and investors' attitude toward risk work together to affect the returns of corporate bonds?
Target maturity bond funds can help investors bridge the gap between the diversification of bond funds and the greater certainty of bond ladders.
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.
Long-term bond funds can deliver outstanding returns when interest rates are falling. But beware: long-term bond funds also carry outsized risk. Learn more about the benefits and risks of investing in long-term bond funds.
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.
Does investing in international bonds provide diversification? Learn how international bonds can help you diversify your portfolio, and where they fail.
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.
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.
Learn the meanings of real return, nominal return, and real yield, and how understanding these concepts can help you make better investment decisions.
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Six investments to consider - and three to avoid - for a bond bear market.
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.
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?
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?
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
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?
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?
Emerging market bonds 2014 outlook: Find out the expected returns, the key risks, and the outlook for local-currency bonds and emerging corporates.
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 more about the risks of corporate bonds, and the difference between the risk of individual corporate bonds versus corporate bond funds and ETFs.
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.
What are the risks of municipal bonds? Learn more about the risks of municipal bonds, and the difference between the risk of individual munis compared to mutual funds and ETFs.
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.
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.
Individual TIPS may be free of credit risk, but TIPS mutual funds and ETFs are highly vulnerable to rising interest rates. As a result, TIPS funds may not provide as much inflation protection as investors may expect.
Funds that are linked to the Barclays Aggregate U.S. Index don't provide a full range of diversification. How can you augment your bond index fund?
What are the risks of high yield bonds? Learn more about the risks of high yield bonds, and the difference between the risk of individual high yield bonds compared to high yield bond funds and ETFs.
The historical performance numbers for short-, intermediate- and long-term bonds. Which category is poised for the best returns in the coming years?
What circumstances regarding the economy, investor sentiment, and corporations' financial health typically fuel the best returns for high yield bonds?
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.
Find out how real estate investment trusts, or REITs, how their historical returns stack up against the risks, and whether you should consider investing in REITs.
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.
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.
Are Vanguard bond funds right for you? See the list of all Vanguard bond funds and ETFs, along with tickers, expense ratios, and Morningstar ratings.
The newest job in the bond world is drawing recruits from the world of mathematics and physics. These numbers- and computer-focused folks are called quants, and they practice the art and science of quantitative analysis.
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.
Finding quality bond market data takes some digging, but there's plenty out there if you know where to look. Here are some of the best free resources on the web for current and historical bond market data.
Learn the key steps to evaluating bond funds, and narrowing down the list of choices to determine which bond fund is right for you.
In bonds, face value refers to what is owed to a bondholder when the security matures. By tradition, most bonds in the U.S. have a face value of $1,000.
The long bull market in bonds has ended. What can you do to prepare for a new era of sub-par returns for bonds?
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:
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.
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.
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.
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.
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.
Actively managed vs. passively managed bond funds: the key differences between active and passive management, and which has delivered better returns.
Find out the six bond market segments provide income investors with the highest yields.
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.
: Selling bonds is a complex endeavor. There are millions and millions of dollars at stake even in the
The definitive first quarter 2014 bond market performance overview: 1Q return data, factors that helped bonds' performance, Fed policy, and outlook.
Find out why using a taxable account to buy a mutual fund before it makes a distribution can actually cost you money.
Emerging market bonds can provide attractive long-term returns, but they also carry more risk than most segments of the bond market. Find out if investing in emerging market bonds is right for you.
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.
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.
Diversification can help reduce risk, but its effectiveness in doing so depends on the way you diversify. Learn the common mistakes investors make when trying to achieve portfolio diversification.
What's the best way to invest in bonds, mutual funds or ETFs? Learn the cost and return difference between bond mutual funds and bond ETFs.
Short-term bond funds for beginners: learn the basics, yields and historical returns, risks and ways to invest via mutual funds and ETFs.
Inverse bond funds can be an effective short-term vehicle for sophisticated investors to bet against the bond market. However, inverse bond funds also come with substantial risks.
Learn the basic definition of bond upgrades and downgrades, and what changes to a bond’s credit rating may mean for your portfolio.
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.
What factors should you consider in determining your appropriate allocation to stocks, bonds, and cash?
Are bonds a good investment right now? It may depend on how far the Federal Reserve raises rates. Many experts see interest rates rising as high as 4%, but Bill Gross has a different take.
Bond index funds are the simplest and most cost-effective way to invest in bonds. With extensive diversification, low fees, and an approach that’s easily understood by the average investor, bond index funds may well be the best option for those who are seeking to earn investment income.