Bonds

Bond Value Calculator

The bond value calculator below will help you determine the value of a bond given its annual interest payments, the discount rate, the number of years it has until maturity and its par value at maturity. Personal financial advisors often recommend bond investing as a means to diversify a portfolio and add an element [...]

Callable Bonds and Interest Rate Risk

A callable bond, also known as a “redeemable bond”, provides the bond issuer with the right to buy the bond back from the holder before the bond reaches maturity. Usually, the terms of a callable bond includes rules and guidelines regarding the conditions under which the issuer may redeem the bond early. A [...]

Definition: Above Par (Bonds)

Par value or “face value” is the term used to describe the value of a bond at maturity, typically $1,000. Bonds are usually quoted as a percentage of their par value, so a bond trading at 99 is currently trading at $990.

“Above Par” is the terms used when the bond is trading at greater [...]

Bond Ladder Investing

A bond ladder is a bond investing strategy under which the investor purchases a number of bonds that mature at regular intervals in an effort to minimize the risks associated with investing in fixed-income securities. The strategy is also employed to manage cash flows by matching the timing of these flows with the investor’s [...]

The Relationship Between Bond Prices and Interest Rates

While bonds provide an element of stability for an investor’s portfolio, they are vulnerable to economic changes that can decrease their value. In fact, the biggest threat to bond prices is rising interest rates. Interest rates constantly go higher and lower with their direction determined by a number of factors, including decisions by the [...]

The Benefits of Bond Investing

A bond is a debt security through which the investor essentially lends money to a corporation, a municipality, a government organization. The bond “issuer” agrees to pay the lender a specified interest rate during the life of the bond and the repayment of the face value of the bond at maturity - when the [...]

Investing in Bond Mutual Funds

A bond represents an investment in municipal, government, or corporate debt. Bond mutual funds can be a good choice for conservative investors who, rather than take on high risk in search of superior returns, seek to protect their principal while earning a regular income. Using the money invested by shareholders, professional money managers buy [...]