Sentences with phrase «hold their bonds to maturity because»

Not exact matches

Holding individual bonds is often looked at as being superior to bond funds because you can simply hold an individual bond until maturity.

Many individual bondholders believe the implications of interest rate fluctuations don't impact them because they'll receive their principal value on an individual bond if held to maturity.

Because the semiannual inflation adjustments of a TIPS bond are considered taxable income by the IRS, even though investors don't see that money until they sell the bond or it reaches maturity, some investors prefer to get TIPS through a TIPS mutual fund or exchange traded fund (ETF), or to only hold them in tax - deferred retirement accounts to avoid tax complications.

Because this calculation is only necessary to determine the bondholder's basis, it need not be done by the bondholder until sale or other disposition of the bond and, if the holder holds the bond until maturity, it need never be done.

A lot of people argue that individual bonds are safer because they can be held to maturity, but a bond fund is nothing more than the summation of all the individual bonds it holds.

an indicator of how long a security position or lot was held; possible values are Long: held for more than 1 year; Non-Reportable: lot or position was closed as the result of a transaction other than a sale; no reportable gain / loss was reported, the holding period and resulting term are not reported; Short: held for 1 year or less; and Unknown: Fidelity does not know how long the position or lot was held; this state typically exists because the shares were transferred to Fidelity from another institution and the holding period prior to the transfer was not communicated; for fixed - income securities, this is the period of time from the security's issue date until the maturity date; for example, for a 10 - year corporate bond the term is 10 years

I've held XSB and XBB before and I'm not a huge fan of them because they don't necessarily hold their bonds until maturity (especially the long term fund), so you face realized capital losses when then sell bonds to maintain their duration range.

This is because there are fewer entities capable of holding the bonds to anything near maturity.

A callable bond is worth less to an investor than a noncallable bond because the company issuing the bond has the power to redeem it and deprive the bondholder of the additional interest payments he'd be entitled to if the bond was held to maturity.

This is because the risks related to such bonds are relatively low compared to other types of bonds and is considered perfect to buy and hold until maturity.

Stronger inflation is the upside case for investors using bond ladders and holding their bonds to maturity, because of higher interest rates to reinvest into.

Liquidity risk is also eliminated by buying and holding a bond until maturity, because there is no need to trade it.

Buying individual bonds provides certainty, because investors know exactly how much they will earn if they hold a bond to maturity, unless the issuer defaults.

This is because many investors do not purchase a 10 year bond and hold it to maturity collecting the interest payments every year.

In general, many bond and bond funds are considered to be lower risk because, for the most part, a bond holder will receive the principal on the bond as long as the bond is held to maturity.