It’s Time to Buy Your First Bond
In this week’s episode of his YouTube series State of the Market, Chief Income Strategist Marc Lichtenfeld answers some of readers’ most common questions about bond investing…
And even shows viewers how to purchase a bond, live online.
There has never been a more crucial time for investors to look to this asset class. The market’s ungraceful tumbles earlier this year humbled many of us, and no one wants to get caught off guard twice.
But bonds do more than just keep your savings safe…
They can also provide steady, reliable income that can even compete with the yields on most blue chip stocks.
Take the bond Marc features in this week’s episode, for example. With a discounted price of just $936.16 compared with bonds’ par value of $1,000, this bond offers the opportunity for a 2.9% coupon and nearly $65 savings – which together create a 4.689% average annual total return.
That’s more than the yield that investors who flocked to Pfizer (NYSE: PFE) this past week will earn on their money…
And it’s 100% guaranteed by law that bondholders will earn that yield – regardless of what happens to the company in the near future.
In a market environment where nothing is certain, that’s an appealing promise…
Many investors are intimidated by bonds because they’ve never been told how they work. But in Marc’s State of the Market videos last week and this week, he walks you through…
- The mechanics of a bond, in which investors act as “backers” to a company that needs a loan
- Maturity date, the date at which a bond comes due and bondholders are paid back their principal
- Par value, the $1,000 standard by which all bonds are priced
- CUSIP, a bond’s “ticker symbol” under which it trades
- Coupon, the amount that a bond pays per year in interest based on its $1,000 par value
- Yield to maturity, the return a bondholder will receive if they hold the bond until its fixed end date
- Yield to worst, the lowest possible yield a bond is allowed to pay by law.
He’ll also walk you step-by-step through the process of purchasing your first bond.
Bond investing is a proven way to protect your portfolio while earning secure income. In fact, it’s one of the best ways to diversify your holdings.
Bonds’ impressive performance under a variety of market conditions creates an environment similar to a permanent bull market in stocks – one where your principal is guaranteed and all you have to do is sit back and watch your nest egg grow.
Watch Marc’s latest State of the Market video now and learn how you can get started.