Today most of the economies in the world are capitalist economy which moves by profit mechanism. Everyone wants to gain from investment and bonds are a common form of investment today.
Bonds are not like share where you invest in the production of the company. Corporate bonds are just like giving loan to the company for business that needs to be given back after a certain amount of time. Unlike shares they don’t get decreased in value or even does not get increased.
There are two different ways you get return out of the bonds. The interest rate is predetermined and you can get it every month. There are other forms of contracts where you get the interest once in a year or at the end of the term. You can choose according to your convenience.
Bonds are less risky than shares as there is no chance of losing money, the gain is also limited. Bonds are issued by companies to raise money from the market when needed. Corporate bonds are traded over the counter and the market is quite huge. Daily trading is in billions of dollars. You don’t have any say on what the company does because you are just lending them money and getting a return for the same.
The bonds that are issued by the company are given rating by rating agencies. This depends on the financial standing of the issuing company of the Corporate bonds.
You can check those rating available in the internet to choose where to invest. This rating is also based on the credit history and repaying history of the company. Those who have repaid the bonds well in time have higher rating.
Bonds are a common form of investment with minimum risk
For more information on Corporate bonds, check out the info available online; these will help you learn to find the Corporate bonds!
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