how to buy bonds: easy investing guide for 2019 - what's the best air purifier to buy

When you want to benefit from a more secure investment than a stock, consider adding bonds to your portfolio.
When you buy a bond, you're basically borrowing money from someone --
Just like you are lending from a bank, the bank not only wants the amount of your loan to be repaid, but in most cases the bank benefits from the interest on the loan.
In the case of bonds, you are basically a bank that loans to a government or a company.
The main difference between this and investing in stocks is that buying stocks will allow you to share the company's profits, but it will also bring risks.
Bonds appeal to investors as they are considered to be less risky, promising to receive "fixed" interest before the bond expires and to repay the original loan at the time it expires.
You can buy four major types of bonds, and one way to buy them is by proxy.
The main bond types from "safest" to "risky" are: the diversity of bond portfolios can be harder than the stock portfolio, as bonds are usually sold in increments of $1,000.
But there is a way to solve this problem: there is an exchange-
Trading Funds focused on bonds.
As we all know, these ETFs can diversify your exposure to bond types, and you can write bond ETFs, such as the "mix-and-match" six packs, even if you can't invest thousands of dollars at any time, give you a chance to have a variety of products.
If you find a low
Cost ETF, you can save yourself a lot of money while not tying all your investment funds on one bond.
Federal government bonds: the least risky bonds are federal government bonds.
Most financial advisers believeS.
The safest government bond in the world
One reason they have very low interest rates compared to other countries. The U. S.
Government even "zero"
Face-to-face bonds, "sold to investors at a discount of face value, redeemed at face value at the time of expiration, but did not pay the cash interest on the loan.
Municipal bonds: consider the next-
Municipal bonds are the safest.
These are bonds issued by municipalities, such as U. S. bonds. S.
Government bonds are the lowest.
Bonds, but in addition to bringing interest to investors, their advantage is that they are nottaxable.
In fact, afterwards
The tax yield may eventually be higher-yielding bond. Investment-
Graded corporate bonds: when the credit rating goes from excellent to excellent company
Decided by the rating agency-
They often issue bonds and need to raise money.
The relative security of these bonds suggests that their interest rates will be lower --than-
Speculation, but because they are issued by a company for its own financing and investment purposes, they usually pay more than the USS.
Government bonds.
High yield bonds: If you want the highest yield, not just add some interest to your initial investment,yield bonds.
Previously known as "junk" or "speculative" bonds, which usually pay a premium because they are more risky for investors --
In other words, when your initial investment matures, you are not quite sure you will take it back. You can buy U. S.
Whether it's a secondary market or government bonds directly from the Federal Reserve.
There is no broker committee if you buy government bonds from the Fed, but you have to buy new bonds. And the U. S.
The Ministry of Finance holds four auctions on a regular basis each year: February, August, November and the first week.
As it is an auction, you have to bid on the various bonds sold.
New Dealer Sales
Issue corporate bonds
From utilities to private businesses, corporate bonds are issued by everyone.
Industry companies.
Basically, any company that wants to raise money from investors without having to issue shares or borrow money from banks will issue bonds.
Therefore, the corporate bond market is very large and very active.
When a new bond is issued, its face value-
What will investors get when it matures-is fixed.
But once the bond is issued, its price will fluctuate in the secondary market.
That is why there is a reverse relationship between yield and price: if bond prices fall, yields usually rise to attract investors;
If the rate of return falls, its price may rise because more investors buy it.
When a bond is issued for the first time, no matter who issues it, traders will help them sell it to investors.
Bond traders earn commissions from the proceeds of selling bonds to investors.
You can buy old bonds.
Contrary to the new question
Brokers in the secondary market
The secondary market includesthe-
Counter markets such as Nasdaq and exchanges such as the New York Stock Exchange. The over-the-
Most bonds are sold in the counter market, including financial institutions and brokerage companies that sell and buy bonds by phone or electronic means.
Brokerage firms issuing bonds can flexibly price the bonds they sell.
But all prices are negotiable. Most over-the-
The amount of counter bonds exceeds $5,000.
The following are the tips suggested by financial industry regulators to buy bonds (Finra)
: Bonds are considered to be less risky than stocks, but not as stable as deposit slips or money market accounts.
Because they are usually less.
The nature of the volatility and the guaranteed return, you will not see your investment grow fast as the stocks in the bull market.
Bonds are attractive to a diverse portfolio, as they provide a stable source of interest payments, usually twice a year during the duration of the bond, and your principal will be returned upon expiration.
But holding bonds that are due is not the only way to make money with them.
You can also sell it at a higher price than you pay.
Remember that bond prices are inversely proportional to yields.
So if investors buy some kind of bond, the price of the bond will rise as the issuer needs to pay less interest to attract the lender.
You can buy bonds with a face value or even less than the face value, and when the price rises enough to get from your original amount, you can sell them.
To evaluate the bond you are interested in buying, you need to know the rate of return on it (
How much percentage do your principal usually pay you every six months until it expires)
Its due date (
The date you will receive the principal)
And terms of redemption.
Bonds are traded at a premium, at a discount, or at a price equal to the face value.
If the bond is traded at a premium, the current interest rate is lower than the yield of the bond.
Therefore, the actual transaction amount of the bond is higher than its face value.
If the bond is traded at a discount, the price will be lower than its face value.
This usually indicates that the interest rate paid by bonds is lower than the current interest rate on the market.
Usually there is less demand for bonds with lower interest rates, because higher interest rates can be obtained in other "fixed interest rates"
Income securities.
Bonds at par value are being traded at par value-
The value of the issuer's redemption of bonds (
Return your principal)
When mature
Some bond issuers allow investors to redeem bonds in advance
Before the due date.
This allows issuers to use the advantage of a lower interest rate to refinance their debt, such as paying off their mortgages and refinancing them at a lower interest rate.
Sometimes there is also a call reserve that allows the issuer to redeem the bond at a specific price on a certain date prior to the maturity of the bond, or a bearish Reserve, this makes it possible for investors to sell bonds to issuers at a specified price before they expire.
Because you take the risk of a bond being redeemed and you have to reinvest at a lower rate, call options usually pay a higher rate.
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