Bonds

Interest rate risk, or the possibility that bond interest rates would rise, reducing the value of an investor’s existing bonds, is a major risk of owning fixed rate bonds. Let’s say an investor buys a bond that pays a fixed rate of 5%, but interest rates in the economy rise to 7%. This means that […]

Yes, if the interest you earn on your savings exceeds your yearly tax allowance plus your personal savings allowance, your savings are taxable. When you cash in bonds, do you have to pay taxes? Taxes can be paid when the bond is cashed in, when the bond matures, or when the bond is relinquished to […]

Bonds and other fixed-income assets with variable, rather than fixed, interest rates are the focus of floating rate mutual funds. When interest rates are low, fixed-income investors look for novel, and often risky, ways to supplement their income. Is now a good time to invest in floating rate bonds? Floating rate funds have grown in […]

Its investment-grade rating has been revoked. Ford’s credit rating was downgraded to BB+, one notch below investment-grade, by Standard & Poor’s, citing fears that the closure of its North American facilities will affect the company’s profitability and cash flow for a long time. Is Ford a bad investment? Ford plans to slash its borrowing costs […]

After declaring a $2 billion loss in the first quarter due to factory closures due to the coronavirus epidemic, the company stated it has issued three series of high-yield bonds, raising a total of $8 billion. Is Ford a bad investment? Ford plans to slash its borrowing costs by more than half by repurchasing $5 […]

Moody’s has assigned GE’s senior unsecured bonds a Baa 1 rating, which is a lower-tier investment-grade rating. The GE bonds examined by Barron’s yielded close to 4%, or around 0.1 percent to 0.2 percent higher than comparably rated corporate bonds. According to the bond market, GE bonds are a tad riskier. What is the rating […]

The interest you earn on a GNMA mortgage-backed bond is fully taxable on your federal and state tax returns. At the end of the year, your investment broker will send you a 1099-INT stating how much interest you received from your bonds, and that interest will be reported on your tax returns as taxable income. […]

We believe that 2022 will be another difficult year for developed-market bonds. Bond yields around the world are generally lower than those in the United States, and a strong currency makes returns considerably lower. Those looking for income are unlikely to find it in global bonds, but diversification benefits should be considered. In 2020, are […]

Our current lodestar, on the other hand, is rising rates, not dropping rates. This means that traditional bonds, such as the 10-year Treasury, are more vulnerable. Yes, wouldn’t the pile of 3 percent loans lose value if a mortgage closes at 4% this week? Yes, logically. However, assuming 10-year T-bond rates do rise from 1% […]

The Government National Mortgage Association (GNMA or Ginnie Mae) produces agency bonds that are backed by the United States government’s full faith and credit. Mortgage-backed securities (MBS) backed by loans insured by the Federal Housing Administration and the Department of Veterans Affairs are guaranteed by the GNMA. The minimum denomination of new GNMAs is $25,000. […]