subject: The Investment Bond Is An Often Overlooked Investment Opportunity [print this page] An often overlooked opportunity for investment is the investment bond. Advisors in the investment field can often be heard praising its virtues. Including the high chance of an equally high return on an investment. In fact there are a myriad of others who seem to feel the same about this subject of great mystery. But before you pick up the phone in order to dial your broker or hop on the old internet there are some questions that you should have the answers to in order to obtain the information you need.
One thing that you should know has to do with the maturity of the bond. How long will you have to hold it before you are allowed to get your money back? After all what good will it be to you if you really find yourself in need of the funds and can not access them? Another thing that merits consideration is if the market will buy up your investment if the need arises for you to sell it quickly.
The second factor that you should pay attention to is if it has an early redemption feature. For example does it have what is called a call date? This often an item that is overlooked by a majority of those who would invest their money. Thus they may be in for an unpleasant surprise when the bond is called away during a period of low interest. As a result an expected high return on their money does not materialize.
A third item that should be of concern and should be asked about is its credit quality, or rating. Is it insured, or guaranteed? Until you find out that particular fact excitement in its high yield percentage should be kept in check. Another thing that should be ascertained is if it is of investment grade or junk, because if you do not then you may never see your money again.
The interest rate is an important consideration as well. How much will you receive for the lending of your money to the issuer. Since you are lending funds to someone else to use you should be properly compensated for that use. Thus it is up to you to decide if the the interest rate and what it will ultimately yield to you is satisfactory.
How much what you are investing in costs is also important. Thus it would serve you well if you discern the actual price of the bonds you are considering for investment. Over the years the money is out of your hands changes in the interest rate and some other factors may cause what you have invested in to be worth less than you expected.
An investment in a bond, or bonds, may be worth what you put into it when you consider what it will yield. But that will only be if you have done the research necessary for finding a genuine opportunity and not something that will cause you to lose your money.
