Anonymous
Anonymous asked in Business & FinanceInvesting · 4 weeks ago

Do you think investing in corporate bonds is a good way to increase income ?

Why or why not 

7 Answers

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  • martin
    Lv 7
    4 weeks ago
    Favorite Answer

    The money you invest today will be worth less in the future. Usually the earning power of the bonds is just barely ahead of the inflation rate. Invest only if you have money you won't be needing in the near future.

    • Ger22
      Lv 4
      4 weeks agoReport

      Thank you that’s why I was thinking too that it isn’t a good investment 

  • Anonymous
    4 weeks ago

    If bonds arent any better rate then CD's, then might as well just do CDs.

  • 4 weeks ago

    Historically yes, but in the current interest rate environment there's just not enough interest, especially when you factor in inflation (which is also modest but still present).  

  • Anonymous
    4 weeks ago

    Why invest in bonds when dividend yields on utiilties and REITS are over 5%?

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  • A.J.
    Lv 7
    4 weeks ago

    It is one method, but there are limitations and drawbacks. The corporation is generally borrowing money with a goal to make more money, so in theory on average, the common stockholders do better, but every investment is a combination of financial risk, timeframes, and expected return. There are also taxes involved in interest and dividends and any capital gains. I use corporate bonds as part of my retirement accounts.Janus Henderson Balanced Fund (JABAX) is a managed mutual fund as generally 50-70% equity and 30 to 50% bonds that they manage and vary. They fall in price in a falling market, but both up and down are not as severe. I the rising market, even with some falls, I've been satisfied with their performance.On November 1, 2018, I bought General Electric bonds 3.2% coupon due 02/15/2021 at $971 per $1000 face value, a little better than BBB rated. They quote now at $1000.40 per $1000 face value and I collected $16 per $1000 Feb 2019, Aug 2019, and should get it Feb and Aug in 2020 and $1016 per $1000 Feb 2021.$109 per $1000 is 10.9% over 2.3 years ( 6.1% in just over a year if I sell now).Considering safe money is under 2% a year in the USA, and there is inflation, I chose correctly that GE was stronger than the public thought at the time, at least in a fairly short term bond. There are preferred stocks I have that are good also at low risk. You have to consider the risks. Healthy company corporate bonds are very low yield not a lot better than a good money market account. My RLJ Preferred A real estate trust bought May 14, 2018 @ 25.37 paying $1.95 per share per year and quoting at $27.90 is even better, so far. Learn as much as you can. It's about risk tolerance, and finding better than average returns for the risk. Spreading risk over many things reduces the overall.

  • Anonymous
    4 weeks ago

    You are not going to get significant profits, especially with low risk bonds, but a solid way to start.

  • Anonymous
    4 weeks ago

    Sounds like you want us to do your homework. No.

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