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Glossary Benefits To Issuers Investor's Options

 

 

 

 

 

 

 

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When considering the investment in bonds, there are two key areas that investors should look at, they are credit quality and redemption features of a bond. There have been arguments in the market that investors should consider the strike price at the point of purchase and the yield. Traditionally, investing in bonds may seem to be sophisticated, it works only as an institutional investment tool. This misperception has been caused by the traditional closed-up trading nature of the bond market since general investors usually buy these bonds from the secondary over-the-counter (OTC) market rather than from an open market. If investors look at the data available from each bond, you will feel more comforts by putting your investment in bonds than stocks, as bonds are very transparent and they usually provide a full list of data, both historic and projected,  which investors would find them comprehensive enough to learn and value each and every bond type according to their financial strength, expectations and risk tolerance.

Unlike stocks and corporate bonds which are insecure, Asset-Backed Securities (ABS) are by far one of the most secure investment available in the financial market next to the U.S. Treasuries. In general, bonds may be considered as stable but low yield investment products, however, there are certain bonds structured to generate yields and returns (either full or partial profit-sharing) much higher than the market average but bear higher investment risks than most ABS such as Mortgage-Backed Securities (MBS) -- Land Bonds and Property Bonds. These Bonds are different from the "High Yields" in the market, as they are backed by certain land and financial assets, and structured with adequate credit supports and redemption features.

The following criteria suggest the key areas that investors should look at when evaluating both strengths and weaknesses of a bond,

Credit quality in respect to ratings assigned by leading credit rating agencies?

What are the collateralized assets?

Interest rate movement?

Yields? Fixed or Floating?

Supply and Demand?

Life Expectancy?

Redemption features?

Issuing size and volume of transaction?

Market conditions?

Alternatively, you may make use of the Characters Table available when making the structural comparisons for different bond types or simply highlight your investment expectations on the table as screening criteria.

 

Important Note to investors: It is important to note that every kind of investment bears certain level of risk, investors are advised to do some homework themselves or consult with their qualified investment advisors for comments before their investments.

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Investing in Bonds
One of the most secure investment tools suits for vast scope of yield or risk expectations

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Choice of Bonds
A full spectrum of Diversified, individually structured investment products

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Evaluating Bonds
according to credit qualities, yields, lives, redemption features...etc.