Bond investors are beating the market this year, but investors in bond mutual funds can't count on taking those profits to the bank. Bond funds have a quirk: They never mature. When a bond comes of age, you get your money back. Bond funds, on the other hand, are eternal...
This calculator compares two bond investments buying a bond at a substantial discount to par value and receiving no coupon (a zero-coupon bond), and buying a bond with a coupon. User can select a Treasury security, corporate bond or municipal bond. Treasury securities are exempt from state income taxes. Municipal...
While some electronic bond trading is available to retail investors, the entire bond market remains an over-the-counter market. Unlike stock trading - for which automation has leveled the playing field for retail and institutional investors - the bond market lacks liquidity and price transparency except for the most liquid of...
A new method of bond portfolio optimization is described. The method is based on stochastic string models of bond returns. It is shown how to approximate the bond return correlation function with Pade approximations and how to compute the optimal portfolio allocation using Wiener-Hopf factorization. The technique is illustrated with...
The term bond spreads or spreads refer to the interest rate differential between two bonds. Mathematically, a bond spread is the simple subtraction of one bond yield from another. Bond spreads are the common way that market participants compare the value of one bond to another, much like price-earnings ratios...
This tool will estimate The Tax-Equivalent Yield TEY for a municipal bond. Income generated from municipal bond coupon payments are not subject to federal income tax. In addition, if the bond was issued in your state of residence, you can also avoid state income taxes. Use this tool to determine...
Similar to a mortgage with a bank, bonds are an issue by a borrower to a lender. When one buys a corporate bond he may be loaning one's money to a corporation for a predetermined period of time, the maturity. In most cases the bond's par value is $1,000, this...
The factors that affect the bond markets and interest rates are very complex. Bond managers make important choices on term, yield curve positioning, sector, and issuers on a continuous basis. A manager can make a fabulous call, only to be wrong a few months later. This makes bond indexing a...
This article is on bond funds. Bond funds can be even trickier than bonds themselves because -- unlike the implication in their name -- they are not really fixed-income investments. Even when a mutual fund's portfolio is composed entirely of bonds, the fund itself has neither a fixed yield nor...
The main highlight of this article is bond index funds. The first bond index fund was in the early conceptual stages in 1985. Some of its advantages include: consistent performance, Index funds enjoy lower operating expenses, tough to beat the market in bonds, diversification. However, it suffers from severe limitations....
At each subsequent time, a convertible bondholder must decide whether to continue to hold the bond, thereby collecting coupons, or to convert it to stock. The firm might call the bond at any time. Because calls and conversions often occur far from maturity, it is reasonable to model this situation...
This article provides information to the investor about junk bonds. To many investors, the term "junk bond" evokes thoughts of investment scams and high-flying financiers of the 1980s such as Ivan Boesky and Michael Milken, who were known as "junk bond kings." But don't misunderstand, if someone has a bond...
The question this article tries to address is do municipal bond funds still have a place in today’s portfolios? After closely examining yield and bond fund expenses, along with other factors such as diversification, it is concluded that many investors would do better with individual issues. A well-run bond fund...
While the SmartMoney One Asset Allocation system provides targets for how much of a portfolio might go into bonds, the Bond Allocation system breaks down that bond component still further. How much might go into low-risk income-oriented bonds, and how much into higher-risk - and potentially more profitable - bonds?...
The Bond Yield Calculator for Excel or OpenOffice Calc enables the automatic generation of scheduled bond payments and the calculation of resulting yield to maturity. The model is equipped to handle 'odd' first time periods and is ideal to speed up bond payment and yield calculations. ...
This paper describes a new method of bond portfolio optimization based on stochastic string models of correlation structure in bond returns. The paper shows how to approximate correlation function of bond returns, compute the optimal portfolio allocation using Wiener-Hopf factorization, and check whether a collection of bonds presents arbitrage opportunities....
This article explains the meaning of Bond and various advantages and disadvantages associated with Bond index funds. It also explains that the price of the bond reacts conversely to the movement in interest rates. As rates move up, the value of a bond tends to move down. As interest rates...
A bond is a debt security, similar to an I.O.U. When an investor purchases a bond, he is lending money to a government, municipality, corporation, federal agency or other entity known as the issuer. In return for the loan, the issuer promises, to pay you a specified rate of interest...
This calculator shows the current price of a bond given the market interest rate that you enter. It also shows how the price of your bond changes with a change of 2 percentage points in interest rates in either direction. Bond prices and interest rates move in opposite directions: If...
Bond strength is a measure of the ability of the units and mortar in masonry construction to remain bonded and resists applied stress and movement, particularly in tension. It is one of the most important properties of masonry, particularly in low-rise domestic and commercial buildings. Based on the outcome of...
