Bonds

SHORT BONDS and WIN. Interests rates can only go up.

>>1451434
So I can't loose any money if I invest in bonds? short bonds does that mean like, short amount of year? Like 3 years?

Corporate bonds my friend

>>1451517
Instead of buying them you sell them in a margin account b/c price is very very very high.

Sell high
buy low

Price high:interest rates low
Price lowers:interest rates go up

>>1451519
can I buy corporate bonds on Think Or Swim? or do I need to buy on another broker.

>>1451517
that means you buy the bond for less than it's worth, betting that the price will go down.

>>1451552
should I buy bonds through a bank?

>>1451637

I have a Scottrade account and can buy plenty of bonds through them. To be fair, I can't afford them though. I like to fantasize about getting 100 year bonds and trying to outlive them.

That said, I think there are better places to get bonds from. Hrm... Doing a google search of buying corp bonds bring up fidelity and scottrade so I suppose I got it right.

Just don't by shitty CCC bonds and you should be alright.

>>1451517

No one has pointed out you can lose money in bonds if the company goes bankrupt.

So things that are rated junk (C, CC, CCC) are highly thought to possibly go bankrupt.

So they trade a discount. That said, a lot of times the companies won't go bankrupt and you make some nice money, but don't be surprised if they do.

Oh another thing about bonds, they come in lots of $1000 and always pay back $1000 when they mature.

So if you buy a bond at $900 and it matures you will get $1000. This term is called buying bonds at a discount.

If the bond is say $1200 and you wait til maturity you will only get $1000. This is called buying on premium. The reason its higher is because the bond has good credit or has a high coupon (interest rate). So sometimes you still make money in the end through coupon payments even though you paid for it. You just have to look at the YTM (yield to maturity) on the bond to see what amount of money you will make.

>>1451679
I'm a newbie so I considered buying bonds in the Danish state (because it should be 100 % safe). I could imagine that I won't earn much on it though. I also considered the USA (have a lot of debt so I imagine they would pay good for bonds? but idk) or Iceland (has a lot of growth right now) It's best to spread the money right? to buy 5 bonds or something for safety.
Cool I'll check out Scottrade.
>>1451687
So if the company goes bankrupt I will loose all the money?
What does it mean that it matures?

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>>1451733

Sorry. Was at college for class. Now I'm back.

Basically a bond has par, coupon, and maturity date.

The par is 1000 for all new bonds issued.

When they are resold before maturity you get cases where they are less than or more than par depending on what the seller is selling at.

Coupon is how much they pay per quarter, semi-annually, or yearly. Government bonds are no coupon though. They just pay you the money when bond matures.

Maturity means how long before they pay you par back. With corporates, it means how long you will be payed coupon payments. With government, it means when you finally get all your money.

It can range from a few months to 30 years (you can get 100 year or perpetual ponds actually but many people don't like them).

IMO the US bonds are safe barring a shutdown of the government where they refuse to pay back the bond money. This would be political suicide for anyone who does so it should be rare. The USA has a lot of debt, but it can just print more money when it runs out. Of course that results in inflation but that is better than not getting your money from a bond.

With corporates the company who issued the bond has to pay the par back when the maturity date happens. If they can't, they go bankrupt which means the bond holders lose their investment.

Most investment grade above BB rating will never go bankrupt unless something major happens.

To be really fair, I'd like to point out that most mortgage bonds were rated AAA before they turned out to be shit. So there is always risk with bonds.