Thank you for your explanations, you are a genius, your explanation silenses Kidamba. I totally agree with your explanations/writeups, experience and your smartness in this value investment. You have taught me alot on how to invest more and more in T-Bonds
Question Sir, if I buy a bond of say 5 years... In the first year I get the interest... Does that mean that the second year interest is gotten on the initial investment plus the first year interest?
If you don't re-invest your coupon (what you are calling interest) then the coupon rate will remain the same as that of the initial investment
But if you want to increase your coupon rate then you can choose to re-invest coupon (that is initial investment + interest) or even add more money there
But it doesn't automatically compound (maybe if it is a new service that has been introduced) but still if still companies introduce(d) it, then the coupon rate will still depend on the Market as in it might not be the same as the one at the time you invested in that bond.
Thank you for your explanations, you are a genius, your explanation silenses Kidamba. I totally agree with your explanations/writeups, experience and your smartness in this value investment. You have taught me alot on how to invest more and more in T-Bonds
God bless you Kakande
Thank you Jordan.
Thanks Alex.
VERY CLEAR, Thanks Mr Alex
Thank you for the awesome insights, Alex! They are always eye opening.
Thanks very much. It is a well balanced clarification. In summary bonds are worthy investing in.
Question Sir, if I buy a bond of say 5 years... In the first year I get the interest... Does that mean that the second year interest is gotten on the initial investment plus the first year interest?
The coupon is given on the initial investment. Say, you bought a 10M bond, the couple is always calculated on that 10M.
You can increase you portfolio by reinvesting the coupons
I still don't understand this
If you don't re-invest your coupon (what you are calling interest) then the coupon rate will remain the same as that of the initial investment
But if you want to increase your coupon rate then you can choose to re-invest coupon (that is initial investment + interest) or even add more money there
But it doesn't automatically compound (maybe if it is a new service that has been introduced) but still if still companies introduce(d) it, then the coupon rate will still depend on the Market as in it might not be the same as the one at the time you invested in that bond.