bonds?

**mintalot** · 04-02-2008, 09:15 PM

hi there,

was looking thru some investments online and came across
some investments and then saw bonds.....

How do bonds works and are there some naming?
The differences between Unit Trusts.......

**Sky_UAG** · 04-02-2008, 11:25 PM

Quote:

Originally Posted by mintalot

hi there,

was looking thru some investments online and came across
some investments and then saw bonds.....

How do bonds works and are there some naming?
The differences between Unit Trusts.......

Are you open to new ideas of investment where you can get returns 8-12% per annum.. are you interested?

just curious..

msg me..

**Leocravensky** · 26-02-2008, 12:25 AM

bonds are loans you give to cooperates or govt. They have a coupon rate in % per annum which are paid out to the owner of the bond.

But bond price does not = to value of the bond. The bond price can be above or below the face value depending on the market interest rate. Example : if bond's coupon rate is lower den market interest rate, the bond can be bought cheaper and vice versa.

**boooliyooo** · 26-02-2008, 01:06 AM

Thanks Leo, i learnt something from here too.

**Leocravensky** · 26-02-2008, 11:45 PM

np, and ya and TS mentioned about unit trust.

Ok unit trust is actually a portforlio of funds(investments) managed by a professional investor, a fund manager.

The fund manager will pick shares/bonds according to the investment strategy of the unit trust. Example : An Asean-Balance fund. The fund manager will pick shares and bonds from Asean to invest to fit the funds' goal.

So for those green investors or more risk adverse they might want to invest in unit trust versus shares. But there are management charge etc as its the full time job for the fund manager to research which are the best companies to invest in which will erode the return versus buying the shares/bonds on your own.

If you are willing to make the effort to do the research, you can consider getting shares on your own. But if you feel that you prefer someone researching for you, you can try out unit trust.

**EeeTee** · 11-04-2008, 05:50 PM

Quote:

Originally Posted by Leocravensky

bonds are loans you give to cooperates or govt. They have a coupon rate in % per annum which are paid out to the owner of the bond.

But bond price does not = to value of the bond. The bond price can be above or below the face value depending on the market interest rate. Example : if bond's coupon rate is lower den market interest rate, the bond can be bought cheaper and vice versa.

Clear explanation.

I would also like to add that interest rate is inversly related to the price of bond ie. i/r increase, price of bong decrease. This will also cause stock price to fall as more people will demand for bond instead of shares.

hmmm....but i have a question, what is the different between bonds and the treasury bills?

And how do we go about buying bonds?

**komirad** · 11-04-2008, 05:56 PM

How about trading(buying and selling) bonds?
And the previous poster's question too

**EeeTee** · 11-04-2008, 06:04 PM

oh ya...i saw some bank offering bond from all over the countries (US, Japan....) but if i just want to buy singapore bonds (SGS-singapore government secruities), how do i go about?

I read from the official website that the issueing of bond is through auction. I dont quite understand that part, please enlighten me.

Kaze.YonGMinG · 11-04-2008, 06:55 PM

secondary market for bonds is less active compared to stock and shares as maturity is usually relatively short.
there are trading for bonds but not as much. usually ppl just get bonds in the primary market. the people issuing them

**EeeTee** · 11-04-2008, 09:15 PM

hw do we get bonds in the primary market? by auction?
hmm.. I dont quite get the idea of auction?