For long-term investment plans bond trading, there is a greater ability for this type of investment to gain small and distributed profits over a longer time frame. And because bonds have a slow steady pace, it becomes more stable and involves fewer risks. The disadvantage for the slow growth of your investments may indicate that you cannot expect to earn profit right away especially in a slow moving bond market. In addition, you may also have less control over your bonds because they take time to mature. |
Also take note that because bonds may require some fees to be paid if you cash them in early, most long term bonds take time to make good money. In choosing between these two major types of investments, the most important thing you have to consider in order to gauge which plan would become more beneficial to you is to contemplate on your reasons for investing.
If you buy a bond in the secondary market the yield will be different then the original price.If the investor pays a price higher the original price the yield will be less, but if the investor pays less for the bond the yield will be higher. It is because of this situation that the yield and price will move opposite of each other. The bond market is less risky then either the forex or stock market. Traders will often buy bonds to lower their risk when either the forex market or stock market are showing high risk. When this happens the price of the bond will go up and the yield falls.
The forex market does effect the price of the bonds. The central banks sell the bonds in there local currency so depending on the rate for the currency so goes the price of the bonds. If there is a strong demand for a certain bond then the money supply falls,a fall in supply and an increase in demand results in an increase in price. This can greatly effect the price and a countries currency. Bond Trading
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