Most small business owners have heard of a small obscure financial product called a surety bond. However, most also don’t know what it is beyond the fact that the government requires one. It’s the “bonded” part of being “licensed and bonded” as a small business. A surety bond is in essence a three way contract [...]
Diversification is critical to any portfolio’s long-term growth. A good diversification plan includes low-risk investments, such as municipal bonds, or “munis”. Municipal bonds are debt instruments issued by government agencies, such as cities and counties, and are rated just the same as any corporate bond. However, with municipal bonds, you may get an added bonus [...]
Investors who are interested in keeping a portion of their investment portfolio allocated into lower risk often choose municipal bonds or private activity bonds. Investing in private activity bonds or other revenue bonds issued by a governing agency typically arrive with a better than average rating, offering a safe investment for diversification. What Are Private [...]
As an intelligent part of a diversified investment portfolio, municipal bonds provide you with consistent, low-risk returns. Investing in municipal bonds, also known as “munis,” provides you with a tax-free income stream, as well as a place to preserve your capital in a tax-exempt instrument. Of course, a municipal bond investment is not a way [...]
No matter what your age or wealth status, it is always wise to continually diversify your investment portfolio. A portion of your allocation should always be in lower risk investments. However, lower risk means lower yield as well, right? Not if you invest in high yield municipal bonds! What are High Yield Municipal Bonds? Municipal [...]
Bond convexity is a complex and advanced bond concept to help investors understand and visualize the changes in yield of a bond. Bonds are debt instruments issued by municipalities or private corporations in order to raise capital for specific projects. When a city wants to build a new bridge, the government will issue a municipal [...]
Your properly diversified investment portfolio should contain a certain percentage of “safer,” smaller yield investments. As a financial instrument, municipal bonds provide one of the lowest types of investment risks. Municipal bonds are debt instruments issued by government agencies, such as cities or counties, with the intention of raising capital and funds for public works. [...]
What is bond convexity? Bond convexity is a direct measure of the duration sensitivity of a bond when its interest rate is changing. There is one key thing to remember here, as bond yields go higher, the price of them goes lower. In essence, the relationship this statement has, between price and yield, it has [...]
Private bonds are, unlike public purpose bonds, used to finance projects instead of public operations and investments. These can be used to back just about any private facility or project that requires the funding. Private bonds are quite often referred to as private purpose bonds, essentially these are the exact same thing, they are just [...]