Bond Market

Understanding Discount Bonds A bond is frequently described as a way to secure income and protect capital, and it’s a vital investment vehicle in any well-balanced portfolio. A certain type of bond, called a discount bond, provides an intriguing opportunity for investors looking to enter the bond market. It’s essential to understand the concept of …

Unraveling How Inflation Affect Bond Valuation Introduction It’s crucial to understand how bonds function and what precisely a bond valuation implies in order to fully comprehend the workings of the bond market and how various economic factors, such as inflation, affect it. Bonds are one of the oldest and most reliable investment vehicles. They’re essentially …

Understanding Yield to Maturity (YTM) Introduction Yield to Maturity (YTM) is a rather complex concept in the bond market, which can be tricky for beginners to understand. However, a thorough grasp of what it means and how it works is integral to making wise bond investments. This article aims to simplify this concept by breaking …

Understanding the Difference Between YTM and Current Yield When it comes to the bond market, yield reveals critical information about a bond’s profitability. To delve deeper into such an investment, it’s essential to understand two key terminologies: Yield to Maturity (YTM) and Current Yield. While both terms pertain to the same bond yield concept, they …

Understanding Bond Ladder Strategy Definition of Bond Ladder Strategy A bond ladder is a strategy that involves purchasing a series of bonds, each with different maturity dates, effectively creating a ‘ladder’ of investments that mature at different intervals over time. It is a portfolio management method aimed at controlling reinvestment risks and liquidity in the …

Understanding How Bond ETFs Work Introduction A bond exchange-traded fund (ETF), similar to other types of ETFs, is essentially a security that tracks an index, a commodity, bonds, or a basket of assets like an index fund. Bond ETFs are excellent tools for diversifying a portfolio and decreasing risk. In simple terms, they are funds …