What Are Corporate Bonds | How To Invest In Corporate Bonds

7% is the top rate on new issue corporate bonds currently! So in today's video, I'm going to cover: what are corporate bonds, what are the two main types of corporate bonds & how can you start investing in corporate bonds?
Join our live monthly member Q&A immediately after this video as we talk about some of the latest top of mind bond questions 👉 www.youtube.co...
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#jenniferlammer #bonds #fixedincome
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WATCH NEXT (member videos)
⭐ How & When To Invest In Corporate Bonds: • MEMBERS-ONLY: Corporat...
⭐ Credit Risk & Credit Ratings: • Understanding Credit R...
WATCH NEXT (referenced in video)
⭐ Callable Bond Basics: • What Are Callable Bond...
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What Are Corporate Bonds How To Invest In Corporate Bonds
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[@DiamondNestEgg]

Join our live monthly member Q&A immediately after this video as we talk about some of the latest top of mind bond questions 👉 kzbin.infoxp89Y1kcXsM?si=qvhh8Mil5GXQ7KPU 👉 Or learn about membership in this video: kzbin.info/www/bejne/jIDamIJ3fNqeeaMsi=7Vw0dtBxcqIvQzq3 WATCH RECENT MEMBER VIDEOS: ⭐ What To Do When Bond Markets Are Volatile (Member Q&A): kzbin.infoxp89Y1kcXsM?feature=share ⭐ Buy Treasuries Now Or Wait (Member Q&A): kzbin.infotEg5TUFvoms?feature=share ⭐ Jen's Muni Investing Strategy | Five Common Muni Pitfalls: kzbin.info/www/bejne/mXynepeNeZt8fLs ⭐ September Live Member Q&A: kzbin.info/www/bejne/hmKxhnWtnr6jh80 ⭐ Bond Diversification Strategies: kzbin.info/www/bejne/l4DTp4icarSMftE Thanks for visiting our personal finance channel! We hope this content will help fast-track your financial journey! Everyone's financial journey is different. Please note that: 1) there are questions/ comments which I will not be able to answer without fully understanding your financial, personal & other circumstances & 2) we will not ask you to call us or send us money in the comments on this channel or any of our other social media accounts, so if you see comment(s) along those lines, it is most likely spam - PLEASE DO NOT ENGAGE WITH SPAMMERS OR GIVE OUT YOUR PERSONAL INFORMATION FOR YOUR OWN SAFETY.

[@DavidLitman-ph9lu]

The 7% corporate bonds you've highlighted are relatively long term, with maturation dates in 2033 and 2035. I'm not ready to lock in for so long and will stay in T bills for now, until we truly have a "generational opportunity"!

[@Mark-Rain]

You can always sell bonds before maturity. if the Fed rates drop, the bond cost will rise considerably.

[@Mark-Rain]

@@ano2170 Reminds of GM bonds in the 90s.

[@deepaksubramony5438]

But I hear it can be really difficult and tricky to sell bonds in the secondary market?@@Mark-Rain

[@TexanfrmDal]

Thank you for explaining corporate bonds. For the time being, I'm sticking with Treasuries as i think interest rates are going to continue to go up.

[@DiamondNestEgg]

Thanks for sharing

[@matthewpoynter3099]

It would be great if you could talk about bond funds. Especially ones with defined maturity like ishares ibonds or bulletshares.

[@eliseleblanc740]

I invest in both corporate and high yield (junk bonds) ETFs. They hold hundreds of bonds across different issuers and industries so spreads the risk out.

[@DiamondNestEgg]

Thanks for sharing Elise

[@ronjr831]

I know almost nothing about bonds and don’t invest in them. I find your videos very easy to understand. I do invest in stocks, real estate, and cds. I may start investing in bonds in the future. Thanks.

[@DiamondNestEgg]

Glad the videos are helpful

[@marcuspaz24]

Thanks for this video, Jen, and for explaining the unsecured bond categories

[@debrabullion3766]

A bit too complicated for me at this time. It seems there are better bonds & treasuries out there to pick from. Great tutorial! 😊

[@boodles07]

Agreed. I am not looking for any duration longer than one or two years and the rates for those are not attractive enough.

[@elyssaberger5901]

Super excited about the 7% bonds. I’m ready to add something else to my portfolio besides my TBill ladder and my 2yr T-Bond

[@DiamondNestEgg]

Hopefully this video & the member video on corporate bonds coming out this weekend will help kickstart your corporate bond journey Elyssa!

[@freeroamer9146]

Your explanation is concise and to the point. Even unsecured bonds are still less risky that many if not most stocks. I'm going to give it a go! 👍

[@DiamondNestEgg]

Good luck!

[@amydevico1640]

while we have such high rates in treasuries, I think I will pass on investment grade bonds. It is more than likely I will need to buy investment grade bonds to get higher yields in the future, when treasuries do not offer such high rates. But now it does not seem worth it

[@alexanderlee6509]

Seems like there is a lot of interest in hearing about bond funds/ETFs. What I struggle with is, if I purchased an individual bond and then rates rise, the value of my bond may fall. But if I hold till maturity, it will eventually yield the rate I expected to receive when I first purchased the bond. Generalizing this, if I hold all my bonds to maturity, I will never have a realized loss (short of default) although I may have earned a smaller yield than the market (if rates went up). Contrast this with owning a bond fund. Let's say I purchased a shares in a bond fund two years ago before the rapid rise of rates. Now they are all worth less than my basis. Will I ever recover? Does the fund manager hold till maturity or sell at a realized loss? It feels like I don't control my "destiny" when I own a bond fund. Can you shed some light on this.

[@DiamondNestEgg]

You basically summed up what I talked about in this video on why we prefer individual bonds over bond funds: kzbin.info/www/bejne/e4PIhphuqtmqp80 And yes, the longer-dated bond funds have suffered during this rate hike cycle. The manager(s) of each fund have their own strategy & hold to maturity is not typically the norm.

[@oiris4591]

Very informative. Thank you but I'll stick to Treasuries and Agencies Bonds.

[@DiamondNestEgg]

Thanks for sharing

Thank you for your informative videos. I'd be interested in your recommendations with respect to investment grade corporate bond funds and ETF's (active and passive) versus owning individual corporate bonds. Researching/owning/maintaining an individual corporate bond portfolio can be a chore. For example, Fidelity recommends owning between 15 to 40 bonds (A rating or above) to remain diversified. I still own a few corporate bonds, but I've decided that I'm willing to pay a reasonable expense fee and have someone else manage a corporate bond portfolio for me.

[@DiamondNestEgg]

Noted

[@100perdido]

Excellent presentation as usual and thanks. What about a deep drive into floating rate senior secured bank loan funds? My understanding is that these bundled loans are usually below investment grade but carry a lower risk due to their being backed by the assets of the borrower. Is this a good stategy for income investors?

[@davidosisek3867]

I’m interested in floating rate bank loans as well, in a mutual fund. Recent yields on fidelity’s FFRHX & t Rowe price PRFRX funds boast 7+%. Not much daily NAV flux for either fund, but their monthly dividend yields are hard to resist for income seekers.

[@rgorczak]

I have also been watching FFRHX as the monthly dividend yields are VERY attractive, but I'd like to hear Jennifers take on this or these type of funds first.

[@g.t.richardson6311]

@@davidosisek3867 I have had ffrhx for awhile , steady monthly income Also FADMX high yield bond fund, also throws off good income Just reinvesting for now, but may use that down the road as income generator when actually take withdrawls They both part of my “junk” bond portion of my IRA, each about 2.5% of total portfolio

[@goedelite]

I would like coverage of how large the yield difference between US Treasuries and high grade corporate debt would be in various conditions.

[@LogoTimeClark]

Vanguard has a mutual fund VSCSX Vanguard Short Term Corporate Bonds Index. Would this be an alternative for the unsophisticated saver? After negative results during covid the yield has finally begun to provide a positive yield. I'm not sure what the typical duration of a short term would be.

[@darwinjina]

replying to see if she responds. great question

[@pratikpatel6135]

This is what I do in my portfolio based on Jack Bogle suggestion for Bond portion of the portfolio. He suggested that for higher return we can do 50% US government intermediate term bond and 50% investment grade corporate intermediate term bond. To make this possible I’m buying 75% BND and 25% VCIT. VCIT is all intermediate term corporate bond and BND has 25% corporate bond so this combination satisfies 50-50 ratio.

[@DiamondNestEgg]

We'll add this onto our video list - thanks for the suggestion

[@vchill2845]

Awesome Jen thank you for making this video 🎉

[@kojosephine6255]

Default risks must be seriously considered before any action…takes a look at the warning from High Yield Bond(junk bond) market.

[@johnrac3302]

Hi Jen thank you for your fantastic vids. Been a fan for a year. Could you do a dive into physical Gold holdings for newbies who would like to explore the strategy as a hyper inflation hedge?

[@scottlieber7985]

So thorough and knowledgeable. Thank you so much!

[@xx98765]

What about just investing in corporate bond funds?

[@WallaceBMcClure]

Jennifer should change her name to “Bond girl”

[@DiamondNestEgg]

Another supersaver just asked if they could a T-shirt that says BOND GIRL from us...

[@WallaceBMcClure]

@@DiamondNestEgg I hope you get the reference. :-)

[@youtubemusic2700]

If the government raises corporate tax rates to 28 from 21%, that may change the risk profile of corporate bonds you buy today. Just be aware that corporate bonds come with more risk than treasuries and GSEs, so be sure that you'll be well compensated for that additional risk.

[@1bizjets]

Thank you. Always full of info goingv100mph.😂

[@kelfeind]

Good video. Just went to Schwab and couldn't find any 7% bonds. They are selling Mortgage Backed Securities however. Add that to the list of videos to come

[@DiamondNestEgg]

The more attractive yielding ones go really fast. Turn on bond alerts with Schwab so you can find up as soon as a new issue is available. Here's the video I just posted on how to do this: kzbin.info/www/bejne/mYOzh6ijmZJ9g8U

[@boodles07]

I set up the alerts and got one for Camden Property Trust and the rates seemed meh especially shorter term. Is this one in particular attractive to you? I dont have 30 years to lock up money. @@DiamondNestEgg

[@Lumalnatti11]

Wow, I love your channel content. You’re like the market goddess.

[@socko47]

What happens to a corporate bond when a company is sold or bought out?

[@izzybee-hq6px]

thx for the education. can you address etfs or mutual funds as alternative?.

[@joelreyes9600]

Do i lose if i hold my corporate bonds after maturity ?

[@nx6677]

Can I ask you a question on T-Bill please ? On Treasury-Direct, there is an upcoming auction for T-Bills. How to buy since I do not see a discount price for it ?

[@daj4740]

You don't know precisely what you will pay until the auction takes place. But you can follow the recent auction results to see the trends and pretty much where things are at.

[@rosenasser5943]

Cool video! I miss the animations though!

[@brian93ist]

i agree with her have to have a good rating i think treasury are the best safe

[@DanCurtis-e3e]

Question about a US govt default. Let’s say that Congress refuses to raise the debt limit. That wouldn’t reduce the revenue inflow from all forms of taxes nor reduce borrowing up to the previously agreed to debt limit. So, given that these sources of funds are still available, not increasing the debt limit would seem to only impact new spending. If these assumptions are true, why do we hear ‘govt shutdown’ and ‘debt default’ every time the debt limit is debated? Scare tactics or reality?

[@ivanislasbe]

Corporate bonds are safe to invest?

[@YourBestFriendforToday]

Depends on the company. Goldman is not exactly a company that doesn’t pay their debts.

[@petrao8669]

Watch the video and decide if they are right for your risk tolerance.

[@pablod3734]

$100k …. Where do I put it ?

[@allstarchris33]

That Goldman, what's chance of them failing

[@gregh7457]

they make some bad business decisions. they've lost billions on underwriting the apple card. no other banks wanted to touch it but gs took the bait hook line and sinker and now they're paying for it

[@Apeiron242]

Two + times = twice

[@TheAzmountaineer]

7%? Things are getting interesting.

[@goldl3147]

Can't imagine Goldman Sachs go bankrupt or default. If that really happened, we are not far away from a catastrophe.