We’re back talking about investments!
Bank deposits are lending money to the bank. Bonds are lending money to a company or government. Bonds are basically IOUs. With bonds you get paid a percentage of the face value and then all investments are returned to you at the end of the lease.
🔰 Are bonds a low income?
At first unprofessional glance, you could think that bonds are a low income. But if you look closely, you can have a decent profit with low risks.
📉 Is stock better than bonds?
Many people think that stock is much more interesting than bonds. We assume it is because you can make up to 75-120% by stock and only 4-10% by bonds they seem very boring (not true). We believe bonds are better! And here’s why…
💯 The main advantage of bonds
Unlike stock, bonds are very predictable. In addition to the income from interest, you can make money by the bonds' increasing price.
❓ How to make higher returns by using bonds?
At this point, it is important to understand issuers. An issuer is a legal entity that develops, registers and sells securities to finance its operations. They may be corporations, investment trusts, or domestic or foreign governments. Issuers make available securities such as equity shares, bonds, and warrants.
⚠️ Do I need to hold bonds until the issues repays?
Bonds tend to decrease the income as the time of their maturity approaches. It means that there’s no use in holding bonds until the end because your average income is decreasing.