The bond market is the venue in which debt securities are traded prior to maturity. An investor in the bond market buys a debt instrument, which stems from what is essentially a loan to a corporation or government. In exchange for this money, the bond investor receives an interest rate. Debt instruments make interest payments at fixed intervals and for a fixed period of time; therefore, they are called fixed-income securities. The interest rate that the issuer pays is called a coupon. At maturity, the full amount of capital is returned to the investor. For investors in the bond market, two main criteria for buying a debt instrument is duration and credit quality. Duration for the bond market represents the length of the investment; credit quality refers to how strong the borrower is and how able they are to repay the full amount of debt.
Bond Market was last modified: November 21st, 2012 by admin
Ultra low interest rates have inflated financial bubbles and could spark a stock market crash in 2016. At least, that’s the warning from former Fed chairman Alan Greenspan.In an interview on FOX Business Network’s The Intelligence Report with Trish Regan earlier this week, Greenspan warned that the U.S. economy is stagnating..
Thanks to irrationality; gold prices have fallen to the levels not seen since 2010. As I see it, at the current price, the precious metal is presenting a great long-term opportunity. One of the biggest reasons investors should be paying attention to the yellow metal is the turbulence expected in the bonds market. It has the ability to send.
While many commentators are focusing on Greece and China, the former Chairman of the Federal Reserve is warning that America’s bond market is at risk of collapsing.
Speaking with Fox Business on Friday July 10th, Greenspan said, “What people are not focusing on is we have a bond market bubble and when that decides to work its way off.
How safe is your retirement from a financial market collapse? While six years of booming asset prices have lulled investors into a sense of complacency, a hidden risk could spark a bond and stock market crash in 2015.
At least, that is according to billionaire investor Bill Gross. In a blog post published Tuesday, June 30th, the money maven.
Over the past few weeks, U.S. bond prices have declined (close to a semi-crash), and their yields have skyrocketed. Don’t think because you are not directly invested in bonds that what’s going on in the bond market will not affect you. The bond market is much larger than the stock market and a bond market crash can have a major impact .
Immediate term outlook:
The bear market rally in stocks that started in March 2009, extended because of unprecedented central bank money printing, is coming to an end. Gold bullion is up $1,000 an ounce since we first recommended it in 2002 and we are still bullish on the physical metal.
Short-to-medium term outlook:
World economies are entering their slowest growth period since 2009. The Chinese economy grew last year at its slowest pace in 24 years. Japan is in recession. The eurozone is in depression. With almost half the S&P 500 companies deriving revenue outside the U.S., slower world economic growth will negatively impact revenue and earnings growth of American companies. Domestically, America’s gross domestic product grew by only a meager 2.3% in the second quarter, which will negatively impact an already overpriced equity market.