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The Basics of Bonds

The Basics of Bonds. Current Annual Percentage Rate Returns on Savings. Types of Bonds. Government Municipality Corporation Mortgage Backed Securities Specialty Bonds. U.S. Government Bonds. Series EE Series I Series HH. Who are these people…

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The Basics of Bonds

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  1. The Basics of Bonds

  2. Current Annual Percentage Rate Returns on Savings

  3. Types of Bonds • Government • Municipality • Corporation • Mortgage Backed Securities • Specialty Bonds

  4. U.S. Government Bonds • Series EE • Series I • Series HH

  5. Who are these people… • And what denomination I Bond do they appear on???

  6. U. S. Treasury Securities • Treasury Notes • Treasury Bills

  7. Municipal Bonds • General Obligation • Revenue Bonds

  8. Yield of Taxable and Tax-Exempt Investments Sample Federal Tax Bracket 15% 28% 33% Taxable Investment Yield 4% 4.7% 5.6% 6.0% 5% 5.8% 6.9% 7.5% 6% 7.0% 8.3% 9.0% 7% 8.2% 9.2% 10.4%

  9. Corporate Bonds • Risk/Reward • Convertible Bonds • Zero Coupon Bonds

  10. Other Types of Bonds • Bond Mutual Funds • Mortgage Backed Securities • Collateralized Mortgage Obligations • Unit Investment Trusts • Annuities

  11. Interest Rate Maturity Redemption Features Call Provisions Puts Average Life Principal Payments Credit Quality Credit Rating Bond Insurance Price Yield Market Fluctuations Tax Status Diversification Inflation Risk Laddering Volatility Bearer Bond Par Learning the Lingo

  12. Are Bonds for YOU? • Your Goals • Your Timeline • Your Risk Tolerance

  13. The first rule of becoming wealthy is not to lose money.The second rule is not to forget the first rule.Warren Buffet

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