The world is running out of safe, reliable sources of steady income. One of the best remaining sources: U.S. corporate bonds.

U.S. corporate bonds represent about 12% of outstanding 澳洲幸运5官方开奖结果体彩网:investment-grade debt worldwide and account for nearly 33% of 澳洲幸运5官方开奖结果体彩网:yield income, according to Bank of America Merrill Lynch, as reported by The Wall Street Journal.

Bond Basics

澳洲幸运5官方开奖结果体彩网:Government bonds (澳洲幸运5官方开奖结果体彩网:Treasury bonds) are fixed-income 澳洲幸运5官方开奖结果体彩网:securities maturing ꦰin more than 1💙0 years. U.S. Government debt is considered among the safest of all investments.

Corporate bonds are issued by companies, which have great flexibility in how much debt they can issue. Terms🀅 for corporate bonds can be anywhere from less than 5 years to more than 10 years. Corporate bonds pay the highes﷽t yields because they offer the most risk.

Current State of Bond Rates

Although bond rates have fallen in 2020, interest rates on 7- to 10-year bonds of high-quality U.S. companies sit at 2.08%, compared with the 10-year Treasury, which hit a low closing figure of 0.78% on Oct. 9, 2020.

As noted, corporate bonds are safe but considered riskier than government debt. The Wall Street Journal reported a likely increase in global interest in U.S. corporate bonds, driving down yields as well as borrowing costs for U.S. companies.

Why Buy Corporate Bonds?

Corporate bonds can be issued by either public or private companies. Corporate bonds are rated by services such as Standard & Poor's, Moody's, and Fitch, which calculate the risk inherent in each specific bond. The most reliable (least risky) bonds are rated triple-A (AAA).

Highly-rated corporate boꩲnds constitute a reliable sou💎rce of income for a portfolio. They can help you accumulate money for retirement or save for college or emergency expenses.

How to Buy Corporate Bonds

Some corporate bonds are sold via the initial offering by the company in what is known as the 澳洲幸运5官方开奖结果体彩网:primary marketplace. Others are traded over-the-counter (OTC) in the secondary marketplace. Bonds are highly liquid, can be bought and sold quic𝄹kly and are typically offered in $5,000 face values.

澳洲幸运5官方开奖结果体彩网:Brokerage firms, banks, bond traders, and brokers all sell bonds in the primary marketplace. These sellers take a 澳洲幸运5官方开奖结果体彩网:commission. The secondary market, as🌊 noted, includes the exchanges (NYSE, Amex, 🐠and Nasdaq).

Bond prices are quoted as a percentage of the face value of the bond – based on $100, and interest is typically paid every six months. For more see: 澳洲幸运5官方开奖结果体彩网:How To Invest In Corporate Bonds