Bond Investing For Beginners | The Ultimate Guide

Bond Investing For Beginners: This video covers a complete guide to understanding what bonds are, how they work, different types to consider, why to use them, how to invest in them, and the things you need to be aware of. - Enjoy!

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⏰ Timestamps ⏰
00:00 Intro
00:21 What Are Bonds?
01:38 Different Types of Bonds
06:41 Bond Prices & Risks
09:13 Why Invest in Bonds?
11:49 How to Invest in Bonds
16:38 Things To Be Aware Of

What are bonds?
Bonds are pretty much a loan that you give to a government or company, where they pay you back with a fixed amount of income on top of giving you the original payment back when the bond matures (expires).

What are the most popular types of bonds?
Although there are many types, some of the most popular bonds consist of Treasury Bills (T-Bills), T-Notes, T-Bonds, I Bonds, Series EE, and Municipal Bonds to name a few.

What is a bond maturity date?
This is the time that the bond expires and the issuer repays the full amount that you invested.

What are coupon payments?
Also known as interest payments because this is when you get paid your interest from a bond, and are typically paid out every 6 months (depends on the bond). Treasury bills have no coupon payments.

Are junk bonds worth it?
This is a personal decision, but realize that junk bonds are given the name because they come from companies that contain much higher risk and are less likely to pay out the interest, and in some cases, even the principal you invested.

How do bond prices correlate with interest rates?
The price of a bond has an inverse relationship to interest rates. When interest rates fall, bond prices generally rise. When interest rates rise, bond prices typically fall.

Why invest in bonds?
Reliable income stream
Less risk than stocks
Safely preserve capital
Potential tax treatment
Great diversification

What are the top things to be aware of with bonds?
1. Interest rate risk
2. Time & risk tolerance
3. Tax drag in taxable accounts
4. Asset location - Understanding the best locations to place your assets
5. Tax advantage options - Such as U.S. Treasuries and Munis.
6. Compare after-tax returns - high taxes? Munis may be better for you. low taxes? CDs may even be better.

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This content is for entertainment only and does not constitute legal, tax, or financial advice. It is for general informational purposes. The presenter is not a licensed professional. Viewers should consult their attorney, accountant, or financial advisor for advice on specific legal, tax, or financial issues.