Mr. Bond is known for being complicated and hard to get to know. So, we decided to ask him a few questions to help you understand him better.
Mr. Bond, you live an elusive life. So tell us, how do you really work?
When governments or big companies need help raising money, I’m their guy. Let me explain. When you buy me (in other words, invest in me), your money is loaned to the institution that issued the bond.
Why should investors like you?
If you hang with me, every quarter you’re likely to meet my friend Interest. You’ll also see him again when the bond-term is over, which is when you get your money back. That’s why when it comes to investing, I’m a pretty safe bet if the institution you are loaning to is large and established.
Easy, my favorite holiday is the Maturity Date. Although it’s not the most well known, it’s when bondholders get paid the value of the bond they’re holding. Who doesn’t love pay-day!
My close friends refer to me as “fixed-income security.” So don’t let anyone wow you with fancy names for me.