Should You Invest In Bonds? | Is Bond A Good Investment?
In this video, we will look into bonds. What are bonds? What are the benefits of investing in bonds? And whether you should be investing in bonds or not. Enjoy!
► Free Tiger Brokers stock vouchers: https://www.tigerbrokers.com.sg/activity/forapp/welcome/?lang=en_US&invite=KELVIN988
► Interactive Brokers for best commission rates: https://www.interactivebrokers.com.sg/mkt/?src=kelvin5&url=%2Fen%2Findex.php%3Ff%3D47326
► Keep crypto in Hodlnaut for high interest rate https://app.hodlnaut.com/signup?r=OIMWq0TFV
► Keep crypto in BlockFI for high interest rate https://blockfi.com/?ref=447c25b9
► Keep crypto in Ledger securely https://shop.ledger.com/pages/ledger-nano-x?r=5d26d09c2754
► Credit card cashbacks with Fave: https://myfave.com/invite/R2PYT?city=singapore
► Convert credit card payments to cash payments with CardUp: Use "KELVINT928" to
signup at https://www.cardup.co/ and get $20 off
► Tuas Referral Code: RCC4AAF
► Discord chat: https://discord.gg/Sj5HG6sedv
0:00 - Introduction
0:38 - What Is A Bond?
Whenever you borrow money from the bank, you are the borrower, and the bank is the lender, that money which the bank lent to you is known as a bank loan. But when the bank is the borrower, and you are the lender, that money which you lent to the bank, is now called a bond.
In return for lending them money, the borrower will give the lender a fixed amount of interest every year. When the bond matures, the money will be returned back to the lender.
2:05 - Benefits Of Investing In A Bond
1. Fixed Income
By investing in bonds, you will know exactly how much you will be getting, and when you will be paid. Company dividends can go up and down, but bond interest rates do not fluctuate.
2. Lower Risk
Whatever money you invested in bonds, that money will be returned back in full to you when the bond matures. However, even though bonds guarantee that you’ll get back your money when it matures, here’s a small foot note, you will only get back your money if the company hasn’t gone bankrupt. This has happened before to Hyflux investors.
https://www.straitstimes.com/singapore/hyfluxs-fall-from-darling-of-the-entrepreneurial-scene-to-troubled-firm-5-must-reads
However, there’s a very easy to avoid the risk of company going bankrupt, and that’s by looking at the bond rating.
3. Clear Ratings
Bonds are rated by international credit rating agencies. It will say whether it’s a good bond, or bad bond. Even though some bonds doesn’t have a rating, there’s a super easy way to check whether it is a good bond or not, that’s by looking at their interest rate, ie the lower the returns, the lower the risk; the higher the returns, the higher the risk.
https://www.investopedia.com/terms/b/ba3-bb.asp
5:17 - Should You Invest In A Bond?
In any investment, you always have to choose between two things, do you want stability or do you want growth? If you are the kind that prefers stability, and do not want to risk losing money. then you can go for bonds. A general guideline is that the older you are, the more bonds you should have in your portfolio, because your risk should be adjusted according to your age. https://www.financialsamurai.com/the-proper-asset-allocation-of-stocks-and-bonds-by-age/
6:21 - My Thoughts
As of right now, I would not invest in bonds. A huge reason is because I’m living in Singapore, and in Singapore we have the CPF. At 65 years old when we retire, we will be paid a monthly income, which should be more than enough for us to live on based on a study by Singapore researchers.
https://www.mom.gov.sg/employment-practices/central-provident-fund/how-you-can-use-your-cpf
https://bit.ly/34JLBQ3
With CPF acting as a bond by giving me a stable income, and with my investments giving me additional income, I don’t see a point to invest in bonds during retirement. But not everyone is in my situation, and not everyone can handle volatility during retirement, in that case, bond is a good consideration during retirement.
What about investing in bonds during retirement? With the market being so volatile, isn’t it better to invest in bonds?
A study by Vanguard looks at the effects of having different % of bonds vs stocks in the portfolio. If you have 100% bonds, your portfolio will be stable but it will have a lower return. But if you have 100% stocks, your portfolio will fluctuate wildly, but it will have a much higher returns.
https://personal.vanguard.com/us/insights/saving-investing/model-portfolio-allocations
So you do not need to invest in bonds just for the sake of stability. Because if you do so, you will be sacrificing a lot of returns for stability, which you might not even need in the first place.
Видео Should You Invest In Bonds? | Is Bond A Good Investment? канала Kelvin Learns Investing
► Free Tiger Brokers stock vouchers: https://www.tigerbrokers.com.sg/activity/forapp/welcome/?lang=en_US&invite=KELVIN988
► Interactive Brokers for best commission rates: https://www.interactivebrokers.com.sg/mkt/?src=kelvin5&url=%2Fen%2Findex.php%3Ff%3D47326
► Keep crypto in Hodlnaut for high interest rate https://app.hodlnaut.com/signup?r=OIMWq0TFV
► Keep crypto in BlockFI for high interest rate https://blockfi.com/?ref=447c25b9
► Keep crypto in Ledger securely https://shop.ledger.com/pages/ledger-nano-x?r=5d26d09c2754
► Credit card cashbacks with Fave: https://myfave.com/invite/R2PYT?city=singapore
► Convert credit card payments to cash payments with CardUp: Use "KELVINT928" to
signup at https://www.cardup.co/ and get $20 off
► Tuas Referral Code: RCC4AAF
► Discord chat: https://discord.gg/Sj5HG6sedv
0:00 - Introduction
0:38 - What Is A Bond?
Whenever you borrow money from the bank, you are the borrower, and the bank is the lender, that money which the bank lent to you is known as a bank loan. But when the bank is the borrower, and you are the lender, that money which you lent to the bank, is now called a bond.
In return for lending them money, the borrower will give the lender a fixed amount of interest every year. When the bond matures, the money will be returned back to the lender.
2:05 - Benefits Of Investing In A Bond
1. Fixed Income
By investing in bonds, you will know exactly how much you will be getting, and when you will be paid. Company dividends can go up and down, but bond interest rates do not fluctuate.
2. Lower Risk
Whatever money you invested in bonds, that money will be returned back in full to you when the bond matures. However, even though bonds guarantee that you’ll get back your money when it matures, here’s a small foot note, you will only get back your money if the company hasn’t gone bankrupt. This has happened before to Hyflux investors.
https://www.straitstimes.com/singapore/hyfluxs-fall-from-darling-of-the-entrepreneurial-scene-to-troubled-firm-5-must-reads
However, there’s a very easy to avoid the risk of company going bankrupt, and that’s by looking at the bond rating.
3. Clear Ratings
Bonds are rated by international credit rating agencies. It will say whether it’s a good bond, or bad bond. Even though some bonds doesn’t have a rating, there’s a super easy way to check whether it is a good bond or not, that’s by looking at their interest rate, ie the lower the returns, the lower the risk; the higher the returns, the higher the risk.
https://www.investopedia.com/terms/b/ba3-bb.asp
5:17 - Should You Invest In A Bond?
In any investment, you always have to choose between two things, do you want stability or do you want growth? If you are the kind that prefers stability, and do not want to risk losing money. then you can go for bonds. A general guideline is that the older you are, the more bonds you should have in your portfolio, because your risk should be adjusted according to your age. https://www.financialsamurai.com/the-proper-asset-allocation-of-stocks-and-bonds-by-age/
6:21 - My Thoughts
As of right now, I would not invest in bonds. A huge reason is because I’m living in Singapore, and in Singapore we have the CPF. At 65 years old when we retire, we will be paid a monthly income, which should be more than enough for us to live on based on a study by Singapore researchers.
https://www.mom.gov.sg/employment-practices/central-provident-fund/how-you-can-use-your-cpf
https://bit.ly/34JLBQ3
With CPF acting as a bond by giving me a stable income, and with my investments giving me additional income, I don’t see a point to invest in bonds during retirement. But not everyone is in my situation, and not everyone can handle volatility during retirement, in that case, bond is a good consideration during retirement.
What about investing in bonds during retirement? With the market being so volatile, isn’t it better to invest in bonds?
A study by Vanguard looks at the effects of having different % of bonds vs stocks in the portfolio. If you have 100% bonds, your portfolio will be stable but it will have a lower return. But if you have 100% stocks, your portfolio will fluctuate wildly, but it will have a much higher returns.
https://personal.vanguard.com/us/insights/saving-investing/model-portfolio-allocations
So you do not need to invest in bonds just for the sake of stability. Because if you do so, you will be sacrificing a lot of returns for stability, which you might not even need in the first place.
Видео Should You Invest In Bonds? | Is Bond A Good Investment? канала Kelvin Learns Investing
Показать
Комментарии отсутствуют
Информация о видео
Другие видео канала
Top 5 Singapore Dividend Stocks | Easiest Way To Find Dividend StocksHow Bonds Can Make You Money Too! 😲 What Are Bond Investment Strategies Now...Chinese Stocks Crash | Should You Sell?I poured my SRS Money into these investmentsA Bubble Waiting to Pop: Sell Bonds and Buy These Investments InsteadHow To Build Wealth With No MoneyHow I Built 7 Income Sources That Make $20,000 Per MonthSeries I USA Savings Bonds | Keep Your Cash Protected Against Inflation | Low Risk SavingsHow You Can Get More Interest On Your Cash Savings In Singapore! (NEW Edition: Nov 2021)HOW TO INVEST IN RETAIL TREASURY BONDSWhy Retiree Saving Over $1.6m In CPF Is A BAD IDEAHow To Get HIGH Interest On Your Cash Savings In Singapore 2021How To Buy Stocks On Interactive Brokers (Start Investing In 17 Minutes)How To Earn 20% Interest on Anchor ProtocolWhich Singapore Bank Has The Best Value For Investors? | DBS, OCBC, UOBHow to Easily Invest in Retail Treasury Bonds 2020 | RTB24 Progreso Bonds, Bonds.ph, Government Bond如何買債券穩收息 創被動收入 【 阿豬投資班 】My 5 Biggest Lessons And Regrets From CollegeWhat's the Difference Between Bonds and Stocks?