14. What is a Bond?
Bonds are pieces of debt of companies or governments and this brief video details further what a bond is. Everyone should know what a stock and a bond are – this video gives a quick intro to that. What stocks and bonds are has a lot to do with how providers of capital interact with users of capital (through equity (which includes stocks for many large companies)) and debt (which includes bonds for many large users of capital). … bond saving investing money finance Michael Fischer …
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im only 15 and this shit i dont know why is interseting to me. my life long goal is to be finacialy secure as an adult is there anyone out there with some advice for me? Thanks
what are penny stocks.?.and are they good?
In US-are low priced stocks (<$5) that trade off-exchange (OTC). Disclosure rqmts and liquidity lower and can be more easily manipulated -tend to do well when investors seeking a lot of risk (often v strong markets). Generally deemed very high risk as not good visibility on co. fundamentals and room for manipulation. Takes away from purpose largely of stock investing – picking stocks knowing fundamentals hard enough. Not a core element of most successful saving and investing plans!
wa a u takig abut
Thanks for sharing your knowlege and provide help to save the money and investing in a proper, low risk market with potential returns.
make sure you get good math scores on your sats then make sure you do tough things
Basically, Bonds are safer to earn money that you invested in, while stock is take that can inflate/deflate at anytime…..But, if I want to make twice as much money within the week, instead of the month, my best bet is stock?
And, if stock is a good thing to use for short-term earnings, is it good from this current government bailout situations going on with these corporations, especially if shares are as much as $1 each from Fannie Me, Freddie Mac, and/or soon to be Sallie Mae?
awesome vid, thanks a bunch…
Bonds safer than stock for same company – debtholders get repaid first. Gov bonds in US considered risk-free, i.e. very safe. Historically stocks have offered better return over many periods although vol higher and timing argued to be impossible – as we can see from recent bank probs, even the pros having trouble making money albeit across overall activities & incl. writedowns.
Stock for short-term earnings v difficult as timing big issue – would rec Video on Time Impact – Hope it helps. Best R
what is the relationship between the bond yields on the US treasuries (2 yr , 5 yr , etc) and the fed funds rate set by the FOMC? if someone could help me out, thanks
very well presented, keep up the good work!
Great video. Some people say birth certificates are “BONDS” what do you say to this? Thanks.
Thanks for comment. Not heard this before – not a bond in the security sense i.e. a securitized debt obligation. Perhaps some link is possible hypothetically but birth certificates are not bonds for saving and investing purposes as I am sure you know. Thanks and best regards, Michael.
Thank you.
Birth Certificates are in fact a form of Currency.Notice they are printed on bank note or bond paper.
How to bond holders absorb debt then?
In regards to birth certs: They are a type of bond (if you will) that is tied into the social security of the new birth. The birth certificate is then put up as a bond from the government to the federal reserve which then gets its loan from the international bankers. Basically, the gov gets loans off your existence by guaranteeing that you will be in debited into the workforce, even at an early age. It is the epitome of human resourcing. I think that is what “rerund5″ was eluding to.
The buyer of the bond (the bondholder) if buys a US or UK government bond for example then has lent money to the government (the issuer of the bond). At maturity the bond would typically be expected to be repaid and the bondholder would get money back after typically collecting some interest in the form of coupons along the way. Hope it helps – please advise if further questions. Best Regards, Michael.
What’s the difference between bonds and debentures (if there is one?).
The two terms are sometimes used interchangeably, but in the US – a debenture is a type of corporate bond that is backed only by the credit worthiness of the issuer and not a specific collateral or cash flow stream. So it allows corporations or governments to borrow in an unsecured fashion (meaning that the assets are not set aside as well against which the borrowing takes place). Treasury bonds would typically be considered debentures. Hope that helps, thanks for interest – best regards, MF
thx fully understood! how about mini-bonds? r they just small versions of these bonds debts? Can you talk about the Lehman bankruptcy if possible? Thanks and keep up the good work!
coupons , so … do you mean that we dont get a return in money that we can spend how ever we like
Let’s say I have 10K in my bank account can I bid on a job that will total up to more than 200K? Can I get a bond to do the job?
They are called coupons because in the past there were physical coupons that were attached to the bonds that would be removed and returned for cash. Today this is electronic largely. That is why these payments are referred to as coupons, and why this term is used in this context – they are not like the shopping coupons.
bonds are secure? I didn’t know they were back by collateral.
I thought bonds were relatively low risk debt instruments that are backed by the people’s faith in the government agencies that issue them.