What Are Bonds? What Are the Advantages of Investing In Bonds?

What are bonds? Why invest in bonds? How do we invest and earn money in bonds? What are the advantages and disadvantages of investing in bonds?

Should I Invest In Bonds? What Are Bonds?

1. What is a Bond?
a. Debt instrument
i. Pag-kakautang
ii. Ikaw ang nagpapautang
iii. Nagpapautang sa mga bangko, company, or gobyerno

2. Why invest bonds?
a. To diversify your portfolio
i. Do not put all your eggs in 1 basket.
ii. Good portfolio – mixture of stocks and bonds
b. Advantages of bonds:
a. Less volatile
b. Less risk than stocks
c. Steady income

3. Paano kikita sa Bonds?
Note: What we are discussing here are individual bonds. Bond fund is a completely different topic na paguusapan po natin sa ating susunod na videos.

a. Thru interest payment

Components of a Bond:
Principal (par value) = amount na iyong pinautang mo
Interest (coupon rate) = amount na iyong kikitain sa bond
Maturity Date (Term) = duration of the bond

For Example:

Treasury Bond

Issue date : 01 Jan 2022
Duration : 3 years (maturity 31 Dec 2024)
Par Value : P 100,000
Interest (coupon rate) : 5% pa
Interest payment : Semi-annual (June / Dec)

Year Date Interest Payment
1 Jun 2022 P 2,500.00
Dec 2022 P 2,500.00
2 June 2023 P 2,500.00
Dec 2023 P 2,500.00
3 June 2024 P 2,500.00
Dec 2024 P 2,500.00 + P100,000 = P 102,500.00

4. Paano makapag invest sa Bonds?
a. Individual bonds
i. Through your broker
ii. Through banks

[janvagabond]

just got, approved and activated my IMA for RTB30.
PHP100, 000.00 pala yung par value/principal amount ko.
Wala na palang BOND CERTIFICATE binibigay… naka SCRIP LESS or PAPER LESS na ngayon… nasa Email na lang yung confirmation… tapos quarterly pala ang coupon share nyan… or dividend share. 😊🙏

[ronamaemanzanilla]

Sir thank you so much po ang comprehensive niyo po magdiscuss

[jessicalaurin]

Thank you This video was very helpful on my part(BSBA-FINANCIAL MANAGEMENT student). I am struggling rn to the finance terminologies kaya sobrang laking tulong po neto for students like me. Hope to learn more from you po! 😊

[pablovinedaordinarioconfis]

napaka informative nmn nito thank u sir meron n nman akong bagong natutunan.

[JessFrancess]

Thank you po for the clear explanation. :)

[giocolorless]

waiting eagerly for the next video sir Fermin!

[louielima]

Thank you for good explanation sir..I already invest in AIA vul plus BPI-philam peso bonds investment on it..😊

[maryjomainfante]

hi po sir, can I ask po what are the features of long term debt bonds

[ahmedhashkar]

Salamat sa isa nanamang clear topic discussion sir Fermin!
Tanong ko lng po, sa binigay mo na interest rate sa example, yan po ba ang actual value sa mga bonds or mas mataas pa? Sa akin kasi po kapag maliit ang interest rate baka ma overwhelm ito ng inflation

[ronaldoesteves]

ang interes sa bond ay parihas na rin sa interes ng degital bank 2023

[Deebo-vsbw]

Sir yung interest lang po ang hindi na mababayaran pag nagdefault? o pati principal po

[rureshim]

Sir, required po ba na monthly mag deposit ng 5000 pesos or voluntary lang po parang depende sa investor?

[charlesgutierre]

Meron po bang bonds na monthly ang bigay ng interest payment :)

[loidakim]

Ano po title ng next vid na ito hehe gusto ko malaman ang laman po sana nun...thank you sir for sharing your knowledge about investing...interesting as always!

[rafaelcaparos]

Sir im 21 napo and want ko maginvest sa bonds may income poba sa bonds na monthly income po? hoping manotice po

[robertocudiamat]

Tulad ng lagi Malimaw at Madaling intindihin! Salamat po. Taga saan po kayo sa Pinas?

[ragdetraveller]

Pa retire nako as 20 years ofw, nagiisip ako ng plan sa savings ko, hoping makatulong ang chanel mo, new subscriber

[vilmacastillo]

sir konti ln pla ang int ng interest ng bond

[angelwingstv]

treasury bond it's a government? and where we can buy.. or a process it?

[Melorinakiefer]

How munch is the lowest amount can invest for bonds?