The Money-Making Guide to Bonds: Straightforward Strategies for Picking the Right Bonds and Bond Funds

by Richelson, Hildy

• ISBN13: 9781576601228
• ISBN10: 1576601226
• Edition: 1st
• Format: Hardcover
• Copyright: 2002-09-01
• Publisher: John Wiley & Sons Inc

Summary

Two financial consultants offer a guide to bond investment in the United States. They describe Treasury securities, U.S. savings bonds, U.S. agency debt securities, mortgage securities, municipal bonds, corporate bonds, and junk bonds. Purchase options and investment strategies are then discussed.

Table of Contents

Preface	xi
Acknowledgments	xvi
PART I: BOND BASICS	1	(38)
The Evolution of a Bond: From a Verbal IOU to an Electronic Entry	3	(16)
Evolving in Early History	5	(2)
Debuting in Colonial Times	7	(1)
Developing after the American Revolution	8	(3)
Entering the Twentieth Century	11	(1)
Changing Through the Latter Twentieth Century	12	(3)
Metamorphosing in Recent Times	15	(4)
The Life of a Bond: How It Is Created, Issued, Priced, and Traded	19	(20)
By Way of Background	20	(2)
Preparing a Bond	22	(2)
Rating a Bond	24	(3)
Setting a Coupon Rate	27	(1)
Launching a Bond	28	(1)
Understanding Risk	29	(2)
Determining a Bond's Yield	31	(5)
Pricing a Secondary Market Bond	36	(3)
PART II: BOND CATEGORIES	39	(126)
U.S. Treasury Securities	41	(16)
U.S. Treasury Notes and Bonds	43	(4)
U.S. Treasury Bills	47	(1)
Strips	48	(3)
Tips	51	(6)
U.S. Savings Bonds	57	(16)
Series EE Savings Bonds	59	(5)
Series HH Savings Bonds	64	(3)
Series I Savings Bonds	67	(6)
U.S. Agency Debt Securities	73	(8)
Fannie Mae and Freddie Mac	74	(1)
Farm Credit System	75	(1)
Federal Home Loan Bank System	75	(1)
Financing Corporation	76	(1)
Resolution Funding Corporation	76	(1)
Student Loan Marketing Association	77	(1)
Tennessee Valley Authority	77	(1)
Federal Agricultural Mortgage Corporation	77	(4)
U.S. Agency and Other Mortgage Securities	81	(16)
Mortgage-Backed Securities	85	(4)
Collateralized Mortgage Obligations	89	(8)
Municipal Bonds	97	(26)
General Features	98	(1)
Risk Features	99	(2)
Ratings and Other Security Enhancements	101	(2)
Mechanics of Purchasing Munis	103	(1)
Taxable Status of Munis	103	(3)
Taxable Municipal Bonds	104	(1)
Private Activity Bonds	105	(1)
Tax-Exempt Bonds	106	(1)
General Obligation Bonds	106	(3)
Revenue Bonds	109	(14)
Education Bonds	111	(2)
Entertainment Industry Bonds	113	(1)
Health Care and Hospital Bonds	113	(2)
Housing Bonds	115	(2)
Public Power Bonds	117	(1)
Tobacco Bonds	118	(1)
Transportation Bonds	119	(1)
Water and Sewer Bonds	120	(3)
Corporate and Junk Bonds	123	(22)
General Considerations	124	(3)
Key Categories of Corporate Bonds	127	(4)
Corporate Medium Term Notes	131	(2)
Corporate Retail Notes	133	(3)
Corporate High-Yield Bonds: AKA Junk Bonds	136	(5)
Covering Corporate Convertible Bonds	141	(4)
Bond Look-Alikes	145	(20)
Bank Certificates of Deposit	146	(3)
Broker Certificates of Deposit	149	(2)
Single Premium Immediate Fixed Annuities	151	(4)
Deferred Fixed Annuities	155	(4)
Nonconvertible Fixed-Rate Preferred Stock	159	(6)
PART III: BOND PURCHASE OPTIONS	165	(46)
The Self-Directed Approach: How to Buy Individual Bonds	167	(14)
Buying Online	168	(4)
Choosing a Broker	172	(5)
Evaluating Bond Prices	177	(4)
The Managed Approach: How to Choose among Bond Funds	181	(30)
Checking the Costs, Hidden and Unhidden	185	(3)
Classifying the Funds	188	(4)
Unit Investment Trusts	188	(1)
Closed-End Funds	189	(2)
Exchange-Traded Bond Funds	191	(1)
Open-End Mutual Funds	191	(1)
Understanding the Portfolio Types	192	(13)
Tax-Exempt Funds	192	(3)
Taxable Funds	195	(10)
Choosing a Bond Fund	205	(6)
PART IV: BOND INVESTMENT STRATEGIES	211	(44)
Asset Allocation: How to Fit Bonds into a Portfolio That's Best for You	213	(16)
Allocating Your Assets	214	(5)
Comparing Stocks and Bonds	219	(2)
Selecting Bonds That Meet Your Needs	221	(7)
Conservative Investments	222	(1)
Balanced Investments	223	(2)
Speculative Investments	225	(3)
Reevaluating Your Portfolio	228	(1)
The Maximization of Profits: How to Make the Most Money from Investing in Bonds	229	(26)
Knowing When to Buy and Sell	230	(10)
Investing for Tax Advantages	240	(4)
Investing by Risk Tolerance	244	(6)
Investing for Income Needs	250	(5)
Appendix: Useful Websites	255	(4)
Notes	259	(5)
Index	264