Sentences with phrase «to hold a bond to maturity»

By holding the bonds to maturity, you will indeed get your principal back, but in an environment with higher interest rates and inflation, those same nominal dollars will be worth less.

Suppose, again under the same circumstances, that the investor holds the bond 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.

An added incentive to do so is that one is more likely to hold bonds to maturity rather than react to any near - term fluctuations due to changes in interest rates.

It's important to remember that bond funds buy and sell securities frequently, and rarely hold bonds to maturity.

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

The pool of capital is fixed, but that does not mean that you are holding bonds to maturity as you would do with your own bond ladder.

Like interest - rate risk, this downgrade - risk is not as big an issue for investors that hold their bonds to maturity because they will continue to receive the fixed payments.

If the funds hold their bonds to maturity, they will get back the bonds» full value — but inflation will have cut the purchasing power of the bond's face value.

Holding bonds to maturity via a bond ladder can be considered a way to navigate these volatile investing waters.

To make a more interesting example, let's consider a 10 - year fixed - rate coupon - paying US Treasury bond, but instead of holding the bond to maturity, we create a pseudo-constant 10 - year maturity bond.

The yield on a Treasury bill represents the return an investor will receive by holding the bond to maturity, and should be monitored closely as an indicator of the government debt situation.

Yields can be measured in a number of ways, including coupon yield, or the stated interest rate of the bond, and yield to maturity, which is the total rate of return when an investor holds the bond to maturity.

Careful portfolio management, he said, would allow the central bank to absorb the losses over time by trying to hold bonds to maturity rather than selling at a loss.

It's less certain with an intermediate - term Treasury fund, which doesn't hold its bonds to maturity, since it's uncertain how much you'll gain or lose from the price - change component of return as bonds «roll down the yield curve», yields / prices change, and the change in valuations is incorporated into the fund value.

Whatever happens in the bond market, you'll get your principal back if you can hold a bond to maturity, explains Jason Vincent, president of Matco Financial.

The option to hold a bond to maturity and «get your money back» (let's assume no default risk, you know, like we used to assume for US government bonds) is, apparently, greatly valued by many but is in reality valueless.

In that case, whether you hold the bond to maturity or sell it earlier, you may see a capital gain or loss depending on the tax elections you've made.

If you are planning to hold a bond to maturity, then Yield to Maturity is the metric that you care about.

Also as with stocks, if you plan on being a long - term investor and holding your bonds to maturity, you don't really need to know every facet of bond trading.

The returns are among the lowest as well but you are virtually guaranteed a fixed return if you hold your bonds to maturity.

Unlike most types of bond mutual funds which maintain a constant duration, Defined Maturity Funds allow the duration of the fund to shorten naturally, by buying bonds which all mature around a specific maturity date, and holding those bonds to maturity.

Holders of these bonds also locked in a coupon payment of 4 % per year for the next 30 years should investors choose to hold these bonds to maturity.

Ideally, you'd hold a bond to maturity to reap the full benefit of a guaranteed payback, but you can sell early on the secondary market (via a broker).

If you're holding the bond to maturity, the fluctuations won't matter — your interest payments and face value won't change.

Holding bonds to maturity will ensure that your return is not affected by interest rates.

So you're only assured of getting the full inflation - fighting benefits if you hold the bond to maturity.

The yield at that time was about 1.6 %, meaning if you held the bond to maturity that would be your annualized return.

Surely that new purchase should make you feel better than the old one: after all, if you hold both bonds to maturity, the newer one will deliver an annual return 120 basis points higher.

I hold my bonds to maturity with my principle concern of income generation.

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.

Total return investors want to buy a bond when its price is low and sell it when the price has risen, rather than holding the bond to maturity.

This allows you to know before you invest one cent exactly how much your minimum return will be if all you do is hold a bond to maturity.

If all you do is hold the bond to maturity you will earn a minimum of 8.21 % per year... and you know this before you invest one cent.

If you hold a bond to maturity, none of this applies.

When someone complains to me about the price of a mortgage bond, after analysis, I often say to find an entity that is willing to hold the bond to maturity, or slightly less, and they can garner full value.

Hold the bond to maturity or choose to redeem your bond early in any given month, with no penalty for exiting your investment early.

A: No, if you intend to hold a bond to maturity, you typically can ignore its fluctuating price and yield, assuming that the issuer is still able to pay you as scheduled.

If you hold a bond to maturity, you will receive the interest payments due plus your original principal, barring default by the issuer.

Mutual funds may hold bonds to maturity, but the newer bonds in the fund will still bear the risk, so you could lose money when you eventually do sell your bond fund.

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.

My advice is to hold your bonds to maturity; periodic fluctuations are meaningless.

Though some investors choose to hold bonds to maturity, many sell before this date and realize gains or losses.

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.

Yields can be measured in a number of ways, including coupon yield, or the stated interest rate of the bond, and yield to maturity, which is the total rate of return when an investor holds the bond to maturity.

Better still, if you want to buy individual bonds, consider purchasing new issues and then holding the bonds to maturity.

Although it is true that if you hold a bond to maturity you will eventually receive its par value.