I always thought that investing in bonds would be a pretty basic activity...You see an interest rate, you buy the bond, you get the payments.Wrong!I've been set straight by the book The Only Guide to a Winning Bond Strategy You'll Ever Need : The Way Smart Money Preserves Wealth Today by Larry E. Swedroe and Joseph H. Hempen.
Contents: Introduction; Bondspeak; The Risks of Fixed-Income Investing; The Buying and Selling of Individual Bonds; How the Fixed-Income Markets Really Work; The Securities of the U.S. Treasury, Government Agencies, and Government-Sponsored Enterprises; The World of Short-Term Fixed-Income Securities; The World of Corporate Fixed-Income Securities; The World of International Fixed-Income Securities; The World of Mortgage-Backed Securities; The World of Municipal Bonds; How to Design and Construct Your Fixed-Income Portfolio; Summary; Afterword; Appendices; Notes; Glossary; Acknowledgments; Index
While not an expert investor by any means, I thought I understood the basics about bonds.I figured that buying a bond meant that you looked at the rating on how strong the company is, chose something that was investment grade, and then buy the security that provides the interest rate that you want to achieve.The reality is far, far different.I didn't realize there's really eight risks you have to manage when buying bonds: interest rate risks, credit risk, reinvestment risk, inflation risk, event risk, tax risk, liquidity risk, and agency risk.I didn't understand that the lack of transparency in the broker market means that you can get severely burned on a bond purchase and end up losing your stated interest rate *and* your principal.And of course, there are a myriad number of products, each with benefits and risks, and you can easily end up buying something that was designed to be "sold", not designed to be "invested".Swedroe and Hempen do a great job in outlining these things and many more in a relatively clear way.I say "relatively" because there is a fair amount of math and financial concepts presented here that you *do* need to understand and think about.This book would never be mistaken for a "Bonds for Dummies" title, but for serious investors looking to thoroughly understand the subject matter without delving into all the minutiae of formulas and calculations, you'd have a hard time topping this offering.
I'd definitely recommend this book to anyone who is serious in their financial investments and takes personal responsibility for them.While you may be at the stage of life where equities are more important to you than bonds, there's information here that will allow you to round out your financial education and acumen, and it's a purchase that will pay for itself many times over.
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The Only Guide to a Winning Bond Strategy You'll Ever Need: The Way Smart Money Preserves Wealth Today (Hardcover)
I really wanted to love this book...I still have my original copy of the 1964 Yearbook, and as far as I'm concerned, it's still the definitive edition.With the announcement of this HARDCOVER edition, I was hoping the publisher would take the opportunity to make this parody look like a REAL yearbook.One of the things the NL was great at doing was an Exact Parody of the thing they were satirizing.In the original edition the paper utilized different stocks for different functions. Also, the book could be placed upside down and backwards on a surface and aside from the paperback binding, it looked like a vintage yearbook.This version is loud, garish, the buttcheecks have been covered up, and the logo is wrong...Perhaps I'm a purist, but the design of this book is just all wrong.It should have been released in a dust jacket that could be removed, with a real looking binding of a yearbook underneath.Also, the printing inside the book looks like it was printed from an old copy of the yearbook magazine, instead of the original stats or negatives...Yes, the comedy is still great, but the design is greatly flawed...I'd only recommend getting it if you have to have it...Otherwise, hold out for an original copy, it just feels better!