Category Archives: Bonds

Fixed Income

Fixed Income represents a distinct asset class, typically of corporate and treasury bonds. This type of investment doesn’t usually have a high return, but gives a consistent “fixed” return over time

How Interest Rates Affect Bond Prices

Since the bottom fell out of the stock market in 2008, investors have been shifting money from stocks into bond funds. Since 2007, there have been $1.39 trillion invested in Bond Funds versus $193 billion in stock funds. The most logical explanation is an attempt to find income and safety, but are bonds truly safe?

Junk Bonds

A high-risk bond with a low credit rating. Junk Bonds usually have a much higher yield than investment-grade bonds.

Zero Coupon Bond

A zero coupon bond is a bond sold without interest-paying coupons. Instead of paying periodic interest, the bond is sold at a discount and pays its entire face amount upon maturity, which is usually a one year period or longer.

Yield To Maturity (YTM)

Yield To Maturity is the interest rate that will make the present value of a bond’s remaining cash flows (if held to maturity) equal to the price (plus accrued interest, if any).