Investing in bonds is very safe, and
the returns are usually very good. There are four basic types of
bonds available and they are sold through the Government, through
corporations, state and local governments, and foreign
governments.
The greatest thing about bonds is that you will get your initial
investment back. This makes bonds the perfect investment vehicle
for those who are new to investing, or for those who have a low
risk tolerance.
The United States Government sells Treasury Bonds through the
Treasury Department. You can purchase Treasury Bonds with maturity
dates ranging from three months to thirty years.
Treasury bonds include Treasury Notes (T-Notes), Treasury Bills
(T-Bills), and Treasury Bonds. All Treasury bonds are backed by
the United States Government, and tax is only charged on the
interest that the bonds earn.
Corporate bonds are sold through public securities markets. A
corporate bond is essentially a company selling its debt.
Corporate bonds usually have high interest rates, but they are a
bit risky. If the company goes belly-up, the bond is worthless.
State and local Governments also sell bonds. Unlike bonds issued
by the federal government, these bonds usually have higher
interest rates. This is because State and Local Governments can
indeed go bankrupt – unlike the federal government.
State and Local Government bonds are free from income taxes – even
on the interest. State and local taxes may also be waived.
Tax-free Municipal Bonds are common State and Local Government
Bonds.
Purchasing foreign bonds is actually very difficult, and is often
done as part of a mutual fund. It is often very risky to invest in
foreign countries. The safest type of bond to buy is one that is
issued by the US Government.
The interest may be a bit lower, but again, there is little or no
risk involved. For best results, when a bond reaches maturity,
reinvest it into another bond.
|
The Ultimate
Stock
Trading Guide
Discover extremely profitable simple
but powerful trading methods that
give you an almost unfair advantage
and make you win despite the
current market weakness. Start
trading smarter and educated today!
|
|
Candlestick Trading
for Maximum Profits
Reaches Number One
Three months after its release,
"Candlestick Trading for Maximum Profits""
becomes the top online candlestick
trading course.
CLICK HERE |
|
