Bonds

ASK A QUESTION
Bonds
  • Asked by Anonymous

  • Asked by Ching Li Chew

    Hariz Arthur Maloy
    Hariz Arthur Maloy, Independent Financial Advisor at Promiseland Independent
    Top Contributor

    Top Contributor (Apr)

    Level 7. Grand Master
    Answered 2w ago
    There are 6 asset classes available. Equity Bond Property Commodity/Collectible Cash Alternative/Speculative For commodities, you can learn to trade futures on their prices, hold them physically like gold, or buy funds that invest in such commodities. This would also include things like luxury watches, wine, art. Lastly, for alternative or speculative investments, you could look at forex, crypto currency, some form of short term trading, even gambling. I'd say you can try them out and develop an interest, but I'd still probably limit to 5% of my portfolio for each of these 2 asset classes.
  • Asked by Anonymous

    Gibson Junxun
    Gibson Junxun
    Level 3. Wonderkid
    Answered 2w ago
    Personal preference, I’ll go for stocks for its dynamism in the market. Bonds in general are more towards wealth preservation. At the start of the transaction, you‘ll know what would be the end value of your investments but your money will be stucked throughout the duration of the bond. A lot of opportunities and events can happen from the time you transact to the end of your bond period. Stocks, on the other hand, would require slightly more effort in monitoring and nurturing your portfolio.but in return you get more flexibility with your money and potentially higher returns over time as the money you invested in it is used as the same purpose as to how your money would be used if let says the company issues a bond. Cheers to a wonderful investing journey ahead!
  • Asked by Anonymous

    Clarence Chua
    Clarence Chua, Financial Planning Specialist at Prudential Assurance Singapore
    Top Contributor

    Top Contributor (Apr)

    Level 6. Master
    Answered 2w ago
    Government bonds are usually safer than corporate high yield bonds as Hariz has mentioned. But even when it comes to Government issued bonds, it is important to look at the strength and rating of the said government. And also the political environment and stability of the country. After all, it is also possible for a government to default. Though bonds are considered a less risky investment as compared to other classes of asset. It is ultimately important for you to invest in other classes and have a diversified portfolio.
  • Asked by Anonymous

    Ang Yee Gary
    Ang Yee Gary, Medicine at National University Of Singapore
    Level 3. Wonderkid
    Answered 2w ago
    Are u a net buyer of stocks in the near future? If yes you should hope for prices to be lower so u make more returns in future. A high stock price only benefit those who have already bought and waiting to cash out.
  • Asked by Anonymous

    Kenneth Fong
    Kenneth Fong
    Top Contributor

    Top Contributor (Apr)

    Level 5. Genius
    Answered 3w ago
    Without knowing your portfolio allocation and risk appetite, I'm going to assume that you're a relatively conservative investor looking to protect your capital (or principal) while earning a bit of dough. How To Invest In Bonds There're tonnes of things to look out for when investing in bonds. But for the sake of simplicity, I'll focus on one thing today. When you invest in bonds, whether long or short term, you should always adhere to the general rule of diversification . Similar to almost all other forms of investment, it's never a good idea to put all your eggs (assets and risk) in one basket (single asset class). Even with bonds, you'll want to diversify (and lower) the risk by creating a portfolio of several bonds. Each bond should preferably come from: 1) Different Issuers In the off chance any issuer is unable to pay the interest and worse, your principal. 2) Different Types Consider different types like government, corporate, municipal, etc as well as from different market sectors creates protection from the possibility of losses from any one sector 3) Different Maturities This helps you to manage interest risks. You might be wondering, "Simi interest risks?!" Bond prices are usually reflective of the prevailing market interest rate . As interest rates rise, bond prices fall because the opportunity cost (read: cost of missing investments of potentially greater value) becomes higher. The same applies vice versa. This is what I mean in simple-r English: Let's assume that you bought a 5-year bond with a 2% coupon that costs $200. You collect your 2% coupon for 2 years and are happy. President Trump decides to announce some harebrained US Federal Reserve monetary policy that hikes interest rates from 2% to 4%. Suddenly, your 2% coupon is rubbish and you have difficulty selling your bond now because newer bond offerings have better coupon rates of 4%. The low demand will also trigger lower prices on the secondary market. So if you want to sell your 2% coupon 5-year bond to buy another bond with a higher coupon rate, you're going to have to sell it at a discount. Of course, this all applies only if you wish to sell. If you continued holding onto the bond and collecting the 2% coupon, you'll still be getting money. Just not as much as you'd like... But thankfully interest rate hikes don't last forever ( knocks on wood), so if you have a good mix of bonds with different maturities, you can ride out these hikes and drops without breaking too much of a sweat. Bonus: What Bond Should I Pick If I'm A Noob? If you're a complete noob, you can probably start by looking at something like Singapore Savings Bonds (SSBs) as: - the minimum amount to invest is $500 - there's no penalty for early redemption - it returns more than 1% per annum - it's fully backed by the Singapore government (read: safe-r) If you'd like to read more about it, Seedly has a pretty detailed article on SSBs: https://blog.seedly.sg/guide-investing-singapore-savings-bond-ssb-interest-rate-how-to-buy/
  • Asked by Linda Tan

    Ernest Yeam Wee Leong
    Ernest Yeam Wee Leong
    Level 4. Prodigy
    Answered on 01 Apr 2019
    Use age as a factor of percentage to put into bond. eg. age 25, 25% into bonds age 40, 40% into bonds The rationale is that as you grow older, it is ideal that the value of your investment does not fluctuate too much due to the need to use the money. By putting more money into bonds when you are much older, you are most likely to risk losing less of your money
  • Asked by Anonymous

    Hariz Arthur Maloy
    Hariz Arthur Maloy, Independent Financial Advisor at Promiseland Independent
    Top Contributor

    Top Contributor (Apr)

    Level 7. Grand Master
    Answered on 22 Apr 2019
    Always a good to have to provide some negative correlation with your equity holdings. If you're already investing in funds, you can look to invest in investment grade or high quality bond funds to complement your portfolio. Other than SSBs, buying individual bonds will require a high quantum and you'll be exposing yourself to concentration risk on just a few bonds. So buy a fund instead to hold hundreds to thousands of bonds.
  • Asked by Anonymous

    Yong Kah Hwee
    Yong Kah Hwee
    Level 6. Master
    Answered 3w ago
    Low returns = low risk. It depends on your risk appetite. If you can't take risks, then the returns are good enough for you.
See more questions