Learn the basic lingo of bonds to unveil familiar market dynamics and open to the door to becoming a competent bond investor.
 | | MORE ON BONDS | | Many of the units so far in this email course have focused on stocks. Now, let's talk about bonds, which are another very popular type of investment. | | 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 debt holders, or creditors, of the issuer. | | Bonds are generally considered among the safer investments. When dealing with investment grade rated bonds, the risk of a loss of principal is generally small (although not negligible). Bonds issued by the United States government, U.S. government agencies, highly rated municipalities and highly rated corporations have historically offered principal safety and attractive levels of current income. | | Bonds provide consistent income due to their periodic coupon payments. On the downside, the rate of return on bonds is often lower than that of other investments. | | A bond is sometimes called a fixed-income security, due to the fact that it provides periodic income at a fixed rate, read on. | | Bond Valuation | | Bond valuation is a technique for determining the theoretical fair value of a particular bond. | | Read Now » | | |  | | | | CONNECT WITH INVESTOPEDIA | | | | | | | |
:max_bytes(150000):strip_icc()/78050701-5bfc38bac9e77c0026b8a1f5.jpg)
:max_bytes(150000):strip_icc()/89143265-5bfc389546e0fb0051c1675f.jpg)
:max_bytes(150000):strip_icc()/shutterstock_210624379-5bfc2b68c9e77c00517fccc6.jpg)
