Bonds

US Municipal Bonds

An investor invests all or part of his investments in different kind of bonds with the objective of safety. US Municipal...

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International Government Bonds

People invest in bonds for safety and regular income. Investors in the US who want the highest degree of safety buy US T...

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Corporate Bonds

Not everybody has the capacity to handle the risks of the stock market. One however, is not satisfied with parking one&r...

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Capital Bonds

Capital Bonds : Capital Gains Bond Capital gain is the profit you make when you sell a capital asset. Based on the ti...

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Lottery Bonds

Lottery Bonds Definition Lottery bonds are the government bonds in which some of the individual bonds are randomly sel...

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List of Bonds

Bonds Who has a problem in having some extra money in his kitty. People invest money in various schemes like bonds, ...

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Perpetual Bonds

Perpetual Bonds, which are also known as the name of Consol, are the bonds which have no maturity period and keep ...

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Municipal Bonds

Municipal bonds are the bonds that are issued by cities, countries, government entities below the state level, airp...

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Before investing in corporate bonds, it is important to understand the factors that influence bond prices and their security being an investment. 

What to See Before Investing in Corporate Bonds

 The important factors that you should consider when investing in bonds include:

  • Government bonds are support by full faith and credit of the US government. Unfortunately, some corporations go out of business every year. Even the companies that are thought to be vibrant and successful are not free from economic downturns.  Corporate bonds are supported by a company’s assets.  If a company is in financial crunch, bond holders could be at risk. High yield or junk bonds are such corporate bonds that return an investor a higher yield compared to other types of bonds.  These bonds are at a higher risk of default, which is why an investor is compensated with a greater yield.
  • A grading system decides if a bond is either investment grade or under investment grade.  This is not foolproof but this grading system manifests some visibility into a corporate bonds security and a company’s rapport.  Non investment grade bonds are riskier than investment grade bonds and with the lower anticipated risk; the bond yields are lower also.
  • Another factor that can influence a corporate bond, irrespective of the company’s overall financial health is its interest rates.  If interest rate hikes, then existing bond values will drop.  This is not only applied on corporate bonds, but almost on all bonds unless they have specific features associated with them.  While this rise in interest rates may not influence the value of a bond if it is held to maturity, it can reduce the price and it could fetch in the secondary market.  The secondary market is a place where sellers and buyers of bonds sell and buy bonds before their maturity date.
  • One more factor when analyzing risk is whether you are opting for individual corporate bonds or corporate bond funds.  Corporate bond funds do not have a maturity date while Individual corporate bonds have a maturity date. When bonds mature, the capital amount is repaid to the investor and interest payments stop.

What's New - Bonds

Revenue Bonds

Revenue Bonds are one of  the types of municipal bonds in which the bond holders are repaid their principal amount and interest through the......

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Government Bonds

Many investors can therefore, lend a part of their capital to the government. In short bond is a type of a loan where you act as the lender. The......

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Serial Bonds

  Serial bonds are the bonds which though are issued together get mature on different dates unlike other financial bonds which has a single......

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Inflation Linked Bonds

Inflation Linked Bonds, which are also known as Inflation Indexed Bonds or Linkers, are bonds in which principal a...

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Government Bonds

Government Bonds, as the name suggest, are issued by the governments world over to raise funds. The bonds that are issu...

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Fixed Rate Bonds

What is a Fixed Rate Bonds? A bond is a debt security by which the authorized issuers owes the holders a debt and, ...

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Extendible and Retractable Bonds

Extendible and Retractable Bonds Extendible and Retractable bonds have no fixed maturity date. While the maturity per...

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Eurobonds

Eurobonds are international bonds that are issued in currency other than the currency of the country where it is issue...

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Subordinated Bonds

  Subordinated Bonds are the bonds which are ranked after other loans or debts for payment in case of dissolution...

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Corporate Bonds

Corporate Bonds Definition Corporate bonds, issued by a Corporation, are meant to raise the funds for the company&rsqu...

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War Bonds

War Bonds Definition War bonds are the bonds that are issued by governments all over the world to collect funds for mil...

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