Buying corporate bonds
There are plenty of options if you want to invest in corporate bonds . Buying corporate bonds can ensure that your investment portfolio is more balanced . Many Dutch corporate bonds are available on the Amsterdam stock exchange. However, some individual corporate bonds are traded over-the-counter (OTC) on the market.
There are several ways to get corporate bonds. You can ask an investment advisor for a prospectus or offering document. This is an official statement of the issuance of new corporate bonds.
For a private investor, it is more convenient to focus on the already existing bonds on the secondary market. It is also possible to buy corporate bonds at various online brokers, such as DEGIRO . You can easily open an account with a broker to buy bonds at the current price.
Corporate bonds are listed on a percentage basis and are usually issued at 100%. Such a bond can also be resold for more or less than 100% of the nominal value. This depends on the current interest rate on the capital market. The bond price will rise if the interest rate falls and the bond price will fall if the interest rate rises. If a bond falls in value, the issuing body will have to pay a higher interest rate when issuing such bonds again. The nominal value is generally 100% again when issuing a new bond.
When to buy corporate bonds and when not to buy them?
Corporate bonds can often yield a higher return than other bonds. However, there is a fairly large risk that a company can go bankrupt and corporate bonds therefore involve more risk than government bonds. Government bonds are often used if you want to make an investment with little risk.
You can stream the real-time prices of companies by opening a free account with a bank or an online broker. Sometimes a fee is charged for this by an online broker. So make sure that when comparing brokers you also take into account the prices that have to be paid for real-time tracking of the prices.
Compare brokers and start investing in bonds
Are you excited about investing in bonds after reading this article? Compare brokers that offer bonds and find the broker that suits you best!