Financial Advice for All Life's Creeks

Month: July 2020

Bond Investment Basics: Investment-Grade Corporate Bonds

The Average Joe out on the street wants to invest his money in something that generates a reasonable return for him while letting him sleep easy at night. It is often easier said than done as so many investments available today don’t cut the standard either way. Investment-grade corporate bonds are one example of something that may be able to break through the glass and actually reach both objectives for an investor.  
Federal bonds used to be a great way to get a nice return without too much risk, but lately the market has pushed yields on these fair too low to make them worthwhile for most people. Corporate bonds still provide a decent yield in some circumstances. That can satisfy the need for a return on capital, but what will provide for the safety of that money? The answer is investment-grade corporate bonds.  
The term “investment-grade” in this case means that these bonds have been received by credit agencies and analysts and determined to be worthwhile of one’s investment. That is to say that their probability of default is below a certain threshold that makes them attractive. Not every single bond available in the world meets that description, but those rated investment grade have.  
These bonds are typically issued from public companies that are relatively well-known and consistently producing profits. That means that they are likely to continue to pay the yields that they have for some time, and they stand a good chance of making it through whatever storm could come their way. They make for a great investment for many, and they still provide some very solid returns in turbulent times. 

Bond Investment Basics: Non-Treasury Government Bonds

When planning your life out, it’ll be fun thinking of your dream career, your wedding with the one you love, and all the travel you want to do. Unfortunately, all of these life decisions cost money, as well as planning for things like starting a family, retirement, and your end-of-life plans. The good news is that you can start now with making a financial plan. It doesn’t have to be daunting, and missing a step of having to accommodate for unplanned occurrences are normal and should not bring you down. 
Financial planning involves figuring out how you are going to make money. Investments and other forms of passive income are a great way to guarantee extra money in the future to help you out in a pinch. Investing in government bonds can be a great start. There are different non-treasury government bonds to choose from, including the Federal National Mortgage Association, Government National Association, the Federal Home Loan Mortgage Corporation, and a few others. These bonds, also called agency bonds, are issued by federal agencies. Non-treasury government bonds differ from treasury bonds by not being full-faith-and-credit obligations of the government, and a minimal credit risk. However, the interest gained on these bonds are taxable.  
If deciding to invest in government bonds, it’s best to do plenty of research to make sure you are choosing the right one for your needs. Government bonds can result in a great pay-off in the future, so many people find it beneficial to invest sooner rather than later. 

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