Bonds are often called debt securities, some investment instruments in the capital market are: cryptocurrencies, mutual funds, forex, gold, stocks and bonds. The main advantage of having bonds is that we will get a fixed interest (coupon) that is determined for a certain period of time and often we will also get capital gains. For example, if we buy a government bond for $1000, and the interest is set at 1% per month, the interest earned is $10 per month, in a year we will earn $120 in interest. If the market price of the bonds we own rises to $1050 and we sell them, we will get a capital gain of $50.
Bond Investment Risk
If we compare it with other investment instruments in the capital market, bonds are a minimal risk investment.
Where We Buy Bonds.
Bonds can be obtained in the primary market and secondary market,
Buying bonds on the primary market (during the IPO) is the best opportunity to get the bond price in accordance with the face value of the bond. If we buy bonds on the secondary market (exchange) the price is usually higher than the face value. In the secondary market, we will find serial bonds which are denominated in local currency as well as government bonds denominated in USD.
Bond Investment Risk
If we compare it with other investment instruments in the capital market, bonds are a minimal risk investment.
Where We Buy Bonds.
Bonds can be obtained in the primary market and secondary market,
Buying bonds on the primary market (during the IPO) is the best opportunity to get the bond price in accordance with the face value of the bond. If we buy bonds on the secondary market (exchange) the price is usually higher than the face value. In the secondary market, we will find serial bonds which are denominated in local currency as well as government bonds denominated in USD.