Bond Investing Basics

Junk Bonds – How to Analyze, Compare, and Buy High Yield Bonds

Last Updated: March 24, 2020

Junk bonds offer investors a higher yield than “investment grade” bonds, with a higher risk of default. They are also known as non-investment grade bonds, speculative grade bonds, high yield bonds, “high opportunity bonds” or even “fallen angels”. […]

What Happens When a Corporate Bond Defaults?

Author: David Waring

Last Updated: February 25, 2020

Corporate bonds have a much higher yield than treasury securities. The higher interest of course is to compensate for the default risk corporate bonds possess. […]

Types of Interest Payments

Author: David Waring

Last Updated: August 12, 2012

While the definition of interest remains the same no matter how that interest is paid, in order to suite the needs of both the entity issuing a bond, and the buyer of that bond, different bonds pay out their interest payments in different ways: […]

Yield to Maturity – What it is and How it Works

Author: David Waring

Last Updated: August 17, 2017

When investing in a bond that is trading at a premium or discount, the current yield is a misleading indicator for the total return you can expect. If you buy a bond trading at a discount, you will be paid the face value when held to maturity. As the face value is greater than… […]

Treasury Inflation Protected Securities (TIPS) – What They are and How They Work

Author: David Waring

Last Updated: August 17, 2017

Treasury Inflation Protected Securities (TIPS for short) are bonds issued by the US Treasury whose principal and coupon interest payments fluctuate along with inflation. More […]

What are the Taxes on Bond Mutual Funds?

Author: David Waring

Last Updated: February 7, 2020

Like with individual bonds, investments in bond mutual funds are taxed based on the type of bond the fund holds. If a bond fund only […]

Bond Credit Ratings – What They are and How they Work

Author: David Waring

Last Updated: February 25, 2020

Bond credit ratings are the equivalent to an individual’s credit score and are designed to guage the risk that a bondholder will not receive a portion or […]

How Interest Rate Changes Affect Bond Prices

Interest Rates and Bond Prices – An Inverse Relationship

Author: David Waring

Last Updated: April 17, 2020

What is the the relationship between interest rates and bond prices? As one goes up, the other goes down. Why do they have an inverse relationship? […]