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A bond ladder is one of the most popular investment strategies and helps mitigate some of the key risks of bonds. In a bond ladder, an investor buys bonds with staggered maturities – say, one ...
Advantages: You can easily implement an income-investing strategy using index funds or other income-focused funds, so you don’t have to pick individual stocks and bonds here. Income investments ...
On the other hand, investing involves buying assets like stocks, bonds or mutual funds that can potentially earn higher returns that have historically ranged from 7% to 10% annually. However ...
Value vs Growth: Value investing strategy looks at the intrinsic value of a company and value investors seek stocks of companies that they believed are undervalued. Growth investment strategy looks at the growth potential of a company and when a company that has expected earning growth that is higher than companies in the same industry or the ...
It is sometimes referred to as a "dedicated portfolio" strategy. It differs from a “benchmark-driven” strategy, which is based on achieving better returns than an external index such as the S&P 500 or a combination of indices that invest in the same types of asset classes. LDI is designed for situations where future liabilities can be ...
Fixed-income arbitrage is a strategy that involves a substantial level of risk. The strategy itself provides relatively small returns that can be offset with huge losses given varying market conditions and poor judgement calls. Due to the risk-return nature of the strategy, it is not often used by common investors.
But in order for bonds to provide balance in a portfolio, diversification is key. These four strategies for diversifying your bond portfolio can help you get started. 1. Purchase different types ...
The coupon (of a bond) is the annual interest that the issuer must pay, expressed as a percentage of the principal. The maturity is the end of the bond, the date that the issuer must return the principal. The issue is another term for the bond itself. The indenture, in some cases, is the contract that states all of the terms of the bond.