Bonds are the securities which are bringing in the fixed certain income. The person who has purchased the bond becomes the creditor of the company which has manufactured it. Thus, in the end of term of the circulation of the bond, the emitter is obliged to pay to the creditor the sum equal to a bond value plus the fixed income. Routinely on the bond the bond face-value, term of the circulation of the bond and yield is underlined.
Bonds are purchased by those investors for whom the minimum risk of investments is important. As yield under bonds is considered lower than under shares, but more reliable and stable, investments in the bond are considered as good method of preservation of money. The unique risk at bond purchase - a development of inflation when the sum by the time of bond redemption can will depreciate because of inflation.
The estimation of bonds is manufactured by specialised agencies which pirate to bonds a certain credit rating which allows to evaluate to the investor reliability level of the bond and ability of the company of the emitter to pay interest on them and to supply the refund under bonds at the moment of their settlement. The rating of bonds can contain an estimation from ААА (at the highest degree of reliability, the minimum risk and the maximum trust) to D - a default. Level of the fixed yield so of the high-grade bond have, as a rule, lower yield unlike the garbage bonds which rating begins from САА and more low depends on a rating of bonds also.
Public bonds, but yield on them more low, than under corporate bonds are considered as the safest. The market value of bonds, as well as shares, is constantly changed in the market and differs from a bond face-value. But, in comparison with shares, cost of bonds is not hardly subject to sharp takeoffs and falling on a capital market.
Than bonds differ from shares: bonds guarantee the fixed income, recovery of the enclosed money to certain term and have lower scratches in comparison with an investment in the share. Payments under bonds do not depend on a company profit and the emitter is obliged to pay under bonds is not dependent on a market situation of securities while the stock value can fall in price and under shares nobody guarantees payment of dividends.
Happen as well poor bonds which than are not supplied. At failure of the emitter of poor bonds to pay money, for company property arrest on account of amortisation to bonders cannot be put. Therefore it is necessary to be convinced of reliability of the companies manufacturing poor bonds always.