A bond is a debt security item, similar to an IOU. An investor lends money to a company, and the company issues a bond to the investor in exchange. Depending on the terms of repayment, the issuer may have to regularly pay interest on the bond to the investor or pay off the debt by a specified date.
Stocks can be a better investment, but the market is unpredictable in the short-term. On the other hand, bonds can be a good investment for retirement purposes, as well as for the short-term in certain situations.
An example of when a bond is a smart choice for a short-term investment is where a student planning to go to graduate school decides to work for a few years before enrolling. Since the student may need money in the relatively near future, a fixed income security such as a bond is a good investment. Any situation that would make more sense living under a fixed income makes a bond a rational choice.
There are a few characteristics every investor should know about bonds in order to determine a bond's full value. These include:
There are several kinds of bonds, and some bonds fall under more than one bond classification. Here are some common bonds that many people have either encountered or at least heard of:
Consultation with an attorney for most investment decisions is probably unnecessary. However, if there is a dispute with your broker, such as when you lose a significant part of your investment based on the broker's bad advice, you should contact a lawyer immediately. An experienced investments lawyer will help explain your rights as well as preserve any possible remedies you may have.
Last Modified: 05-17-2018 08:04 PM PDTLaw Library Disclaimer
We've helped more than 4 million clients find the right lawyer – for free. Present your case online in minutes. LegalMatch matches you to pre-screened lawyers in your city or county based on the specifics of your case. Within 24 hours experienced local lawyers review it and evaluate if you have a solid case. If so, attorneys respond with an offer to represent you that includes a full attorney profile with details on their fee structure, background, and ratings by other LegalMatch users so you can decide if they're the right lawyer for you.