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Investing in bonds: how to Invest in bonds

2019-12-27 11:04:48

We came here with an article about bonds, as many people remain in expectation about how to invest in bonds

 It is important to keep in mind that it is good to include fixed-income assets, since this is presented as a balanced portfolio, giving way for bonds to be much safer, since an amount of 43.1 billion trillion is available on the market. dollars between bonds and securities of various kinds.

How to invest in bonds?

The bonds are instruments that are usually issued by state agencies, local, national, foreign governments, as this is a process that usually occurs when a certain government needs to borrow money, CNBC editor Rick Santelli has indicated that the bonds are usually I will pay.

To have a more accurate idea about how to invest in bonds it is important to answer certain questions:

What is the duration of the bonds?

They have an expiration date, so at a certain point they end, only that government bonds are usually long-term and this can be advantageous, because, an example of them are the instruments issued by the United States Treasury usually have a duration of 30 years, although a certain average term can be found at some point, but it is still heavy in the long term, on the contrary short bonds usually last very, very little time an example of them is T-Bill Van , because its duration is just 2 weeks.

How to earn by investing in bonds?

Investing in these debt instruments means that we will be lending money to a certain government, or a certain corporation, because they will take care of paying you interest and this is really favorable for investors.

How much do we earn by investing in bonds?

The gain from investing in these instruments is simply due to the payment of interest, which are explained at the time the issuance of said instrument happened, this being agreed by the interested parties, this is explained by Santelli, an example of this may be, if Acquire X bonus `for $ 100 which we receive 1% interest, that represents that we will receive $ 1 annually, or 50 cents, every 6 months, this is just an example, this variation is given according to the amount of investment, then, That is why it is important to know how to invest in bonds.

Your first $ 1,000 to invest in bonds?

The first thing to think about is not to invest in shares, because according to Deepak Chopra, calm is really a favorable point in the volatile market that is around today, with the money from their parents the best advice that CNBC presenters have been able to offer us , and therefore it would be a good option to use when knowing how to invest in bonds.

How to know if we have achieved a good investment?

Great deals are achieved according to credit quality, since the most favorable are government instruments, because although interests may be lower, security is higher and therefore there should be no risk of default. It is important to keep in mind that some credit portfolios tend to classify bonds according to quality, since they have “AAA” to “AA” and “CCC”, “C” and “C” ratings, the latter being low-end, Well, in this way they are classified by Standard & Poors and Moody's.

In summary, knowing how to invest in bonds is really favorable, since this means that we can receive interest on our money, placing government bonds as the most accurate ones to conduct business.

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