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Bonds can create a balancing force within an investment portfolio. If you have the majority of your portfolio invested in stocks, adding bonds can diversify your assets and lower your overall risk. So, how do you go about adding bonds to your portfolio and more importantly, why should you...

My previous article, Bond Basics I, covered several bonds-related concepts, including Face Value, Coupon Rate, Callability, Yield-to-Maturity, and Credit Rating. However, there is still a lot more an investor should know to better understand the seemingly complex world of bonds. Today, we...

Rising interest rates have caused bond prices to decrease and bond yields to increase. Consequently, investors are faced with the decision of investing in longer dated bonds or shorter dated bonds which will mature soon and can be reinvested at higher rates. The global bond market may...

Imagine you have been comfortably holding your bond for several years and you see on the financial news the issuers of your bond have made a tender offer to buy back this bond. What would you do? This may cause instant panic or feelings of uncertainty, especially if you have never...

As interest rates fluctuate or decline many investors often seek new products or consider restructuring their portfolio. Understandably declining rates can give rise to feelings of fear, anxiety or second guessing your investments. Investors who actively monitor their investments may...

An investment fund is a financial vehicle that pools money contributed by a group of individuals to invest in different types of assets. There are numerous investment funds and numerous ways to classify them, however they are most often categorised according to the type of asset in which...

Interest rates are low and have been for quite some time, so it may be hard to remember a time when you could buy an investment grade bond with a coupon of 8.0 percent, but that was once the reality.

If you are a lucky investor who is holding such a bond, you may have noticed that as...

Every investment has a probability of default – it has quantitative and qualitative components. If you are buying a bond – your first concern is usually quantitative “can this company or Government afford to repay me?”. In the case of a company – is it cash flow positive, is it solvent...

In an earlier article this year, I remarked that the paradox of bond prices rising as interest rates rise could be explained by falling credit spreads. So, today I want to delve a little bit more into the usefulness of credit spreads and their importance to bond investors.

What is a...

A popular investment strategy for an investor seeking a predictable cash flow is bond laddering. Bond laddering is in essence building a portfolio of bonds with staggered maturity dates. For example, the portfolio can consist of bonds maturing in three, five, seven and ten years. You can...