Know About Bonds
October 4, 2010
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Posted by admin
Bonds are long-term debt certificates which are issued by an institution with a nominal value (par value) and certain validity. Bond issuer can be like private companies, state enterprises, or government either central or local government. One type of bonds that is traded in our capital markets is the coupon bond with a fixed interest rate during its validity. Investing in bonds is similar as investing in bank.
If you buy bonds, you will earn interest / coupon which are fixed regularly usually every three months, six months, or once a year until it reach its validity. When it reaches its validity, the issuer must pay to the investors in according to the value of the bonds along with last interest / coupon. With these characteristics, for those who retire, of course this is a very good investment because of regular needs when they retire.
Bonds could be the best instrument choice, especially if you have financial goals in the near future (medium). Bonds have the potential to give interest rate that is relatively better than deposits and relatively having lower volatility than stocks. With financial goals between 2-5 years, this investment will probably be the best investment.
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Categories: Financial Information
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Tags: Financial Investment, Money Investment, stock market
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