When you purchase a bond issued by a corporation or government, you are actually loaning the issuer money. The bond specifies the amount of the loan, interest rate, how often the issuer will make interest payments to you and the date the principal of the loan must be paid in full (maturity date). For example,...
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As b as stocks have been throughout the 1990s, other investments also have specific roles to play in a diversified portfolio. And occasionally, when stocks take a breather, bonds can take center stage. Think of a bond as a loan. You loan your money to a government or a corporation and you expect certain things...
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As a bond investor, you’re essentially lending money to the issuer of the bond. So you want to make sure the issuer will pay you back, and with interest. Credit quality can be a valuable tool in making that assessment because it refers to the ability of the issuer to make interest and principal payments...
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The interest municipal bonds pay usually is exempt from federal income tax.* That alone doesn’t make a muni bond or muni bond fund right for everyone, but you may want to explore whether they make sense for your investment goals. Jump directly to a section: Select a Section… How Munis Work Risks and Rewards Are...
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When you purchase a bond issued by a corporation or government, you are lending the issuer money. Typically you can expect to earn a specific rate of interest, or yield, on your loan and receive regular payments, often on a semiannual basis. You also can expect the principal, or face value, of the bond to...
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