The value of the bond moves in opposite directions when compared to changes in the Bank’s interest rate. If interest rates tend to fall, then the value or price of bonds will increase, investors tend to invest in bonds. however, if the interest rate, in general, tends to increase, the value or price of the bonds will fall, and investors will usually tend to invest in banks or deposits. In the meantime, perhaps you also need to take a look at the bail bonds ft Lauderdale, due to this company has helped so many investors in taking the right decisions.
Advantages and Benefits of Bonds
Some of the indicators that attract investors to invest funds in bonds, among others:
Credit risk can be predicted at the beginning, Before investing, it is advisable for investors to pay attention to the rating of bonds, can be interpreted as an indicator to measure the ability and desire of Issuer (issuer) to pay interest (coupon) and principal on time adjusted to the financial condition company.
Liquidity, Bonds can be traded in the market at any time as desired from the investor for the price offered at market prices.
Cash flow for long-term.
Profitability, the bond interest rate is higher than the deposit, for an illustration, if the bank certificate is 1 year at 12%, while the bank loan interest rate is about 18%, then the interest or the bond coupon can be given around 15-17%.
The profit from bond transactions is the coupon or interest and capital gain from trading and trading or bond trading.
If you have a Convertible Bond, an investor may convert their bonds into shares at a set price and then be entitled to benefit from the gain on those shares. For issuers, convertible bonds are a promotional medium aimed at investors to increase bond sales.
The right of Claim First, if the issuer is bankrupt or liquidated, the bondholder has the first right of the company’s assets.