Risks of investing in Bonds

Risks of investing in Bonds

Risks of investing in Fixed Income Securities

While generally considered safer and more stable than stocks, fixed income securities have certain risks:

Market risk

As with stocks, a bond’s value will fluctuate with changing market conditions, including the forces of supply and demand and interest rate changes – when interest rates rise, bond prices fall. However, the fact that bonds have maturity dates makes market risk a concern only if the investor decides to sell the bond before the maturity date.

Credit risk

The risk that the issuer may not be able to meet its obligations in terms of coupon payments or may not be able to pay the principal amount back to the investor at maturity. Also known as default risk or issuer risk.

Liquidity risk

The risk of not being able to execute a trade at the time the investor desires, or being forced to accept a significantly discounted price at the time the investor wishes to sell.

Foreign exchange risk

When the fixed income security is priced in one currency (e.g. US Dollar) and is different from the functional currency of the investor (e.g. Singapore Dollar), the investor is exposed to fluctuations in foreign exchange rates, which may increase or erode investment returns on the fixed income security.

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Sg Bond Rates

Benefits of Investing In Bonds

Benefits of Investing in Bonds or Fixed Income Securities

Here is a list of the benefits of investing in Bonds or Fixed Income Securities.

Benefits of Investing in Bonds or Fixed Income Securities:

Diversification

Historically, the returns of stocks and bonds have not moved up and down at the same time. The practice of spreading money among different asset categories to reduce risk is known as diversification.

Provides a predictable income stream

The investor knows how much interest they can expect to receive, how often they’ll receive it, and when their principal will be repaid.

Transparency

Investors can readily access real-time price and volume information on the SGX website and via trading platforms offered by their brokers. With this transparency, investors can regularly monitor and have up-to-date information on their investments.

Flexibility

Investors can buy and sell fixed income securities on SGX through a broker anytime during trading hours, just like shares. Also, fixed income securities can be bought and sold using familiar stock trading techniques such as stop-loss orders, limit orders and margin purchases.

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Sg Bond Rates

What are Bonds

What are Bonds?

We use the term "bonds" to refer to corporate bonds and Singapore Government bonds. Corporate bonds and Singapore Government bonds are fixed income securities.

Fixed Income Securities refers to securities that provide a return in the form of fixed periodic payments and the eventual return of principal at maturity.

Governments issue government bonds, while supranational institutions like Singapore statutory boards, as well as companies, issue corporate bonds. Preference shares are also issued by companies.

An investor stands to earn a return from the interest payment from a Fixed Income Securities investment. The investment also has potential for capital appreciation upon disposal of the security.

An example of a Fixed Income Security is a corporate bond with a 2.5% interest rate and a 5-year maturity period.

An investor investing $1,000 in this bond would receive annual coupon payments of $25, usually paid semi-annually (twice a year), and be returned $1,000 in the fifth year when the bond matures.

Fixed income securities are offered by SGX for trading. The process of buying and selling is similar to that of a share and can be executed through any broker.

Common Fixed Income Terms

Issuer
The company or government that borrows an amount of money and pays the interest.

Principal
The amount borrowed by the issuer that will be repaid to the investor at maturity. Also known as maturity value, face value, or par value.

Maturity
The end of a bond, the date that the issuer must return the principal to the investor.

Coupon
Interest payment made on a bond, usually paid in twice-yearly installments. A $1,000 bond paying $45 a year as a $45 coupon, or a coupon rate of 4.5%.

Treasury Bills
Short-term government securities that mature in one year or less. They are sold at a discount to the par value. Also called a T-Bill.


Yield
The return earned on a Fixed Income Security. This is obtained from the coupon rate divided by price, and expressed as an annual percentage rate.

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Sg Bond Rates

LTA Bond Rates

Sg Bond Rates: LTA Bond Rates

Singapore LTA bond rates are checked this September 2010.

What is the Singapore LTA Bond Rates and LTA bond details?

LTA Bond Counter Name = LTA n4.08%120521 10k

LTA Bond Counter Code = L06Z

LTA Buy price = 1.042

LTA Sell price = 1.060

LTA bond rate = 4.08 % per annum.

Singapore bond rates are provided for personal use only. We disclaim all liabilities for any error(s) on our Sg Bond Rates site.

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Sg Bond Rates

JTC Bond Rates

JTC Bond Rates

This 23 September 2010, JTC bond rates are checked in Singapore.

What is the JTC Bond Rates and JTC bond details in Singapore?

JTC Bond Counter Name = JTCn4.826%12102410k

JTC Bond Counter Code = J01Z

Buy price = 1.065

Sell price = 1.080

JTC bond rate = 4.826% per annum.

JTC bond rates are provided for personal use only. We disclaim all liabilities for any error(s) on our Sg Bond Rates site.

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Sg Bond Rates

Sg Bond Rates

Sg Bond Rates

Welcome to Sg Bond Rates!

And to the arrival of Sg Bond Rates blogspot.com!

This Sg Bond Rates site is our way to share with everyone our passion to keep track of Singapore bond rates.

If you want to find out what are the initial Sg Bond Rates at offering, Sg Bond Rates is the site to visit.

We thus keep track of as many Singapore Bonds and their Sg bond rates for your interest.

These Sg Bond Rates are taken from Singapore Government Securities as wekk as Singapore corporate bonds on offer to retail investors.

If you are looking for a retail investment in Singapore corporate bonds or SGS bonds like us, you have come to the right place for all things Sg Bond Rates.

Why not make Sg Bond Rates site a must-see, must-visit place to keep track of the latest, the best and the highest Sg bond rates in the bond market of Singapore.

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Sg Bond Rates