Investing in Stocks for Beginners - What are Bonds Tutorial 14

What are bonds. Learn how to invest in bonds. How to make money of bonds and are bonds safer than stocks? Yes. This video goes into how bonds are different than stocks and what are the pros and cons of each bond. Bonds vs stocks 101 tutorial What is a 'Bond' A bond is a debt investment in which an investor loans money to an entity (typically corporate or governmental) which borrows the funds for a defined period of time at a variable or fixed interest rate. Bonds are used by companies, municipalities, states and sovereign governments to raise money and finance a variety of projects and activities. Owners of bonds are debtholders, or creditors, of the issuer. Next Up EUROBOND MATURITY YIELD TO MATURITY (YTM) DISCOUNT BOND BREAKING DOWN 'Bond' Bonds are commonly referred to as fixed-income securities and are one of the three main generic asset classes, along with stocks (equities) and cash equivalents. Many corporate and government bonds are publicly traded on exchanges, while others are traded only over-the-counter (OTC). How Bonds Work When companies or other entities need to raise money to finance new projects, maintain ongoing operations, or refinance existing other debts, they may issue bonds directly to investors instead of obtaining loans from a bank. The indebted entity (issuer) issues a bond that contractually states the interest rate (coupon) that will be paid and the time at which the loaned funds (bond principal) must be returned (maturity date). The issuance price of a bond is typically set at par, usually $100 or $1,000 face value per individual bond. The actual market price of a bond depends on a number of factors including the credit quality of the issuer, the length of time until expiration, and the coupon rate compared to the general interest rate environment at the time. Read more: Bond Definition | Investopedia http://www.investopedia.com/terms/b/bond.asp#ixzz4758wLctE Follow us: Investopedia on Facebook For Finance, Investing, Stock Trading, Banking, Real Estate, Money, Options, Currency, Gold, Market "How to" Tutorials Go to - We have tons of investment, trading & personal finance videos, that are perfect for beginners & dummies. Learn the basics & grow your wealth!

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