What are They?
A bond is a contract to load an amount of money for a percentage return. The loan is paid back with interest after the agreed term.
Choosing a Bond Criteria
Criteria for choosing a bond:
- ** Credit Worthiness
- Yield
Determining Credit Worthiness
You can determine the company's credit worthiness by checking their credit rating. You can query various rating agencies to determine worthiness.
Bond Rating Agencies
- Moody's
- Standard and Poor's
- Fitch
Rating | Invest? |
---|---|
AAA | Best |
AA | Investing Grade |
A | Investing Grade |
BBB | Investing Grade |
BB | Junk |
B | Junk |
CCC | Junk |
CC | Junk |
C | Junk |
D | Junk |
Choose a bond who's rating is BBB and up.
Buying Bonds
You can buy bonds either by buying:
- bond funds
- multiple bonds in a fund
- safety in numbers
- individual bonds
- admin fee
- minimum $ requirement