Sentences with phrase «n't hold bonds to maturity»

In fact, if you don't hold bonds to maturity, you may experience similar interest - rate risk as a comparable - duration bond fund.

Not exact matches

Of course, if you hold individual bonds to maturity, you may be able to ride out price fluctuations, knowing that as long as the bond issuer doesn't default, you will get your principal back at maturity and interest payments along the way.

Each time you buy or sell a bond it cost a painful # 39.95, which works out at about 0.5 % one - off charge on even a large portfolio of # 40,000 assuming you hold to maturity — which you might not.

Sometimes, you can't hold individual bonds to maturity.

Treasury bonds won't lose value if you hold them to maturity.

Equity investments tend to be volatile and do not involve the guarantees associated with holding a bond to maturity.

Soon the investor learns that when purchasing bonds they are also not obligated to hold the bond or bonds until the maturity date.

Holding an individual bond to maturity will result in the return of principal (assuming the bond issuer doesn't default), but those nominal dollars will be worth less with inflation and during periods of higher interest rates.

That effectively offers investors something similar, though not identical, to holding an individual bond to 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.

I think bonds are okay if you do not need more than the coupon interest rate but you need massive capital (like Sam) to be satisfied with that return and not worry about capital losses as rates increase (hold 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.

In this cycle, it will end with interest of reserves rising, and / or, the sale of bonds, which I find less likely (they will probably be held to maturity, absent some crisis that we can't imagine, or non-inflationary growth).

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.

However, it is my understanding that bond - funds don't generally hold those bonds to maturity, but rather trade them like equities.

For investors who plan to hold on to their bonds until maturity, this will not have too much of an impact.

The risk involved in long - term bonds simply does not match their returns at held - to - maturity.

Granted, if you hold the bond to maturity, the bond will ultimately mature at par; however, most people do not hold 30 year bonds to maturity.

But the fact that you can hold the individual bond to maturity does not make it safer than the bond fund in this case.

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

Of course, if you hold individual bonds to maturity, you may be able to ride out price fluctuations, knowing that as long as the bond issuer doesn't default, you will get your principal back at maturity and interest payments along the way.

I understand if you buy an actual bond and hold it to maturity you won't loose principal.

Right now the premium on AAA corporate and the like is so low that I wouldn't recommend picking them up, but when the yield curve eventually becomes a curve again, you can find good risk - adjusted returns in corporate bonds (providing you're holding to maturity).

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.

But anyone holding that bond that can't hold it to maturity, or doesn't want to, is merely a speculator.

As long as bonds are held until maturity, the investor does not have to worry about the day to day price changes in the bond.

You can't hold a fund to maturity, so caution is wise on intermediate and long - term bonds.

If you held your bond to maturity, then yes you will make money — but then this would represent the fixed income portion of your asset allocation, and not CASH.

Unlike individual bonds, many fixed income ETFs do not have a maturity date, so a strategy of holding a fixed income security until maturity to try to avoid losses associated with bond price volatility is not possible with those types of ETFs.

It's true that if you do this you're guaranteed to get your principal back plus interest; however, a bond does not have to be held to maturity.

Inflation - linked bonds are not just a hold - to - maturity strategy.

However, it should be noted that it is not mandatory for an investor to hold these ETFs until maturity as the same trading rules that impact all other ETFs hit this corner of the market as well (see 3 Reasons to Consider the Crossover Bond ETF).

If you don't want to hold the bond until the maturity date and decide to sell it on a secondary market, you may get a lower price than the face value.

Bonds do not return just their stated yield - to - maturity (unless it's both a zero coupon bond and held to maturity).

It's only accurate to use these sheets when the investment vehicle only earns interest, and has no possibility for any profit or loss (so don't use it for any kind of bonds, including zero coupon bonds, unless you're assuming they'll be held until maturity).

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

My suggestion is to, either by addition of new funds or through rebalancing, to add shorter term maturities to bond holdings but not to sell my longer duration holdings or flip them to shorter term.

Held to maturity means the value of the bonds amortizes over time, but price moves don't affect the accounting, unless default is likely.

Unlike individual bonds, most bond funds do not have a maturity date, so holding them until maturity to avoid losses caused by price volatility is not possible.

The advantage of a semi-annual interest payment is also more attractive to some investors, not to mention the fact that the yield at maturity is known at the time of purchase (if the bond is held until maturity and rates determined at the time of issuance).