Other Four Factors Affecting Bond Returns
Whether investing in a single bond or a portfolio of bonds, aside from default risk, the following factors also influence bond returns:
Whether investing in a single bond or a portfolio of bonds, aside from default risk, the following factors also influence bond returns:
Any investment takes risks, and higher risks typically correlate with higher returns. However, when investing in bonds, one should avoid taking unnecessary risks as much as possible.
1. Different entities have different purposes for investing in bonds: Financial Institutions vs Individuals.Financial institutions and individuals, these two different types of entities, have different purposes for investing in bonds.
For beginners, it is advisable to familiarize themselves with three types of bonds: U.S. Treasuries, investment-grade bonds, and emerging market bonds.Previously, we mentioned that individual bonds have high purchasing costs, making them less suitable for beginner investors. Next, we will delve into bond ETFs to explain this point.
Q1: Should buy bonds when the stock market is in a bull market (when prices are very high)?One opinion is that bonds are not worth considering because their long-term returns are lower than stocks. Is this opinion correct?
Asset Allocation Defined: Achieving a desired risk and return configuration by investing funds across different types of asset categories.
"Can I achieve the same rate of return as Buffett?" A student once asked me this question.
What is Pre-market trading in U.S. stocks？The normal trading hours for the U.S. stock market are from 09:30 AM. to 4:00 PM. on trading days, without a break at noon, allowing investors to trade stocks during these regular hours. However, besides these hours, pre-market or after-market trading is also possible in the U.S. stock market.
U.S. stocks are traded on multiple exchanges, with the two most important being the New York Stock Exchange (NYSE) and the NASDAQ. In addition to these two major exchanges, there are other secondary exchanges and over-the-counter (OTC) systems where investors can trade U.S. stocks. Here are some of the primary U.S. stock trading markets:
We can think of the circuit breaker mechanism as a "fuse". When the market fluctuates too violently, the fuse will melt and break, suspending trading activities in the market temporarily. Trading will resume after a while.