Posts Tagged ‘mortgage bonds’

Bonds 101

Posted October 28, 2008 by Bernz

Everyone always talks about stocks and bonds, bonds and stock but are bonds really and how do they work? This little article is here to talk about the largest kind of bonds you can invest in.

by Creative Commons

Keep in mind that for the individual investor who is working with capital of less than 1,000,000 dollars the best way to invest in bonds is to buy into a bond mutual fund. The only exception is that if your municipality is doing a bond issue for a project and you want to invest in something specifically then that can be fun and help you rise up the social strata of the city but overall even though bonds are traded frequently over the open market mutual funds are the easiest way to get involved in the bond market.

Bonds also have what are called maturity dates. The maturity date is when the entity that has issued the bond buys the bond back from you for face value plus interest or they will pay you part interest over the life of the bond and the rest at the end or they will pay you all the interest over the life of the bond. In any of these cases bonds are generally not volatile. They are issued usually by government entities.

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