Shopping on line can be easy, simple and save you lots of money. It can also take a lot of your time, frustrate you, and result in unwanted purchases. Now the same can be said for regular high street shopping, but with the vast opportunity presented by the Internet it will pay you to spend a few minutes reading this and understanding how to better optimize your Bond Market shopping experience:

1. Compare - without doubt the biggest advantage that the Bond Market offers shoppers today is the ability to compare thousands of Bond Market at a time. This is a great thing, but not necessarily all the time! Too much can be daunting at times so take advantage of the great comparison sites and where possible let them do the hard work for you.

2. Research - if it has been said it will be on the internet. Ignorance is no longer a justifiable reason for buying the wrong thing. Take the time to research in detail everything that you could possible want to know about

3. Testimonials - don't know anybody that has bought a Bond Market? Wrong! If the Bond Market is good the internet will let you know. Use the Internet as a friend and get testimonials before you buy.

4. Questions - Got a question about Bond Market then search the Forums, FAQ's, Blogs etc. Don't be afraid to ask .....

5. Reputation - Never heard of the company selling Bond Market? Don't worry, no reason why you should know every company in the world, but you know someone that does! Use the internet to find out what people are saying about Bond Market and build up a picture of their reputation for sales, returns, customer service, delivery etc.

6. Returns - still worried that even after all of the above your Bond Market wont be what you want? Check out the returns policy. There is so much competition now that someone, somewhere is bound to offer the terms that you are comfortable with.

7. Feedback - happy with your Bond Market then let people know, after all you are depending on others people input in your buying decision, so why not give a little back.

8. Security - check for the yellow padlock on the Bond Market site before you buy, and the s after http:/ /i.e. https:// = a secure site

9. Contact - got a question about Bond Market, or want to leave a comment then check out the sites contact page. Reputable companies have them and respond.

10. Payment - ready to pay for your Bond Market, then use your credit card or PayPal! Be aware of companies that don't accept them, there may be genuine reasons but given the huge amount of choice you have when buying online there is no reason at all not to buy via credit card or PayPal.

The bond market, also known as the debt, credit, or fixed income market, is a financial market where participants buy and sell debt security (finance) usually in the form of bond (finance). The size of the international bond market is an estimated $45 trillion of which the size of outstanding U.S. bond market debt is $25.2 trillion. Outstanding U.S. Bond Market Debt Bond Market Association. Accessed November 13, 2006.

Nearly all of the $923 billion average daily trading volume in the U.S. Bond Market Avg Daily Trading Volume SIFMA 2005 Average Daily Trading Volume. Accessed February 19, 2007. takes place between Broker-dealer and large institutions in a decentralized, over-the-counter (finance) market. However, a small number of bonds, mainly corporate, are listed on Stock exchange.

References to the "bond market" usually refer to the government bond market because of its size, liquidity, lack of credit risk and therefore, sensitivity to interest rates. Because of the inverse relationship between bond valuation and interest rates, the bond market is often used to indicate changes in interest rates or the shape of the yield curve.

Market structure Bond markets in most countries remain decentralized and lack common exchanges like stock market, futures exchange and commodity market markets. This has occurred, in part, because no two bond issues are exactly alike, and the number of different securities outstanding is far larger.

However, the New York Stock Exchange (NYSE) is the largest centralized bond market, representing mostly corporate bonds. The NYSE migrated from the Automated Bond System (ABS) to the NYSE Bonds trading system in April 2007 and expects the number of traded issues to increase from 1000 to 6000. NYSE Bonds press release NYSE Bonds. Accessed May 1, 2007.

Types of bond markets The Securities Industry and Financial Markets Association classifies the broader bond market into five specific bond markets.



Bond market participants Bond market participants are similar to participants in most financial market and are essentially either buyers (debt issuer) of funds or sellers (institution) of funds and often both.

Participants include:

Because of the specificity of individual bond issues, and the lack of liquidity in many smaller issues, the majority of outstanding bonds are held by institutions like pension funds, banks and mutual funds. In the United States, approximately 10% of the market is currently held by private individuals.

Bond market volatility For market participants who own a bond, collect the coupon and hold it to maturity, market volatility is irrelevant; principal and interest are received according to a pre-determined schedule.

But participants who buy and sell bonds before maturity are exposed to many risks, most importantly changes in interest rates. When interest rates increase (decrease), the value of existing bonds fall (rise), since new issues pay a higher (lower) yield. This is the fundamental concept of bond market volatility: changes in bond prices are inverse to changes in interest rates. Fluctuating interest rates are part of a country's monetary policy and bond market volatility is a response to expected monetary policy and economic changes.

Economist's consensus views of Economic indicator versus actual released data contribute to market volatility. A tight consensus is generally reflected in bond prices and there is little price movement in the market after the release of "in-line" data. If the economic release differs from the consensus view the market usually undergoes rapid price movement as participants interpret the data. Uncertainty (as measured by a wide consensus) generally brings more volatility before and after an economic release. Economic releases vary in importance and impact depending on where the economy is in the business cycle.

Bond investments Investment companies allow individual investors the ability to participate in the bond markets through bond fund, closed-end funds and unit investment trust. In 2006 total bond fund net inflows increased 97% from $30.8 billion in 2005 to $60.8 billion in 2006. Bond fund flows SIFMA. Accessed April 30, 2007. Exchange-traded funds (ETFs) are another alternative to trading or investing directly in a bond issue. These securities allow individual investors the ability to overcome large initial and incremental trading sizes.

Bond indices A number of bond indices exist for the purposes of managing portfolios and measuring performance, similar to the S&P 500 or Russell Indexes for stocks. The most common American benchmarks are the Lehman Aggregate, Citigroup BIG and Merrill Lynch Domestic Master. Most indices are parts of families of broader indices that can be used to measure global bond portfolios, or may be further subdivided by maturity and/or sector for managing specialized portfolios.

See also

Notes

External links

The bond market, also known as the debt, credit, or fixed income market, is a financial market where participants buy and sell debt security (finance) usually in the form of bond (finance). The size of the international bond market is an estimated $45 trillion of which the size of outstanding U.S. bond market debt is $25.2 trillion. Outstanding U.S. Bond Market Debt Bond Market Association. Accessed November 13, 2006.

Nearly all of the $923 billion average daily trading volume in the U.S. Bond Market Avg Daily Trading Volume SIFMA 2005 Average Daily Trading Volume. Accessed February 19, 2007. takes place between Broker-dealer and large institutions in a decentralized, over-the-counter (finance) market. However, a small number of bonds, mainly corporate, are listed on Stock exchange.

References to the "bond market" usually refer to the government bond market because of its size, liquidity, lack of credit risk and therefore, sensitivity to interest rates. Because of the inverse relationship between bond valuation and interest rates, the bond market is often used to indicate changes in interest rates or the shape of the yield curve.

Market structure Bond markets in most countries remain decentralized and lack common exchanges like stock market, futures exchange and commodity market markets. This has occurred, in part, because no two bond issues are exactly alike, and the number of different securities outstanding is far larger.

However, the New York Stock Exchange (NYSE) is the largest centralized bond market, representing mostly corporate bonds. The NYSE migrated from the Automated Bond System (ABS) to the NYSE Bonds trading system in April 2007 and expects the number of traded issues to increase from 1000 to 6000. NYSE Bonds press release NYSE Bonds. Accessed May 1, 2007.

Types of bond markets The Securities Industry and Financial Markets Association classifies the broader bond market into five specific bond markets.



Bond market participants Bond market participants are similar to participants in most financial market and are essentially either buyers (debt issuer) of funds or sellers (institution) of funds and often both.

Participants include:

Because of the specificity of individual bond issues, and the lack of liquidity in many smaller issues, the majority of outstanding bonds are held by institutions like pension funds, banks and mutual funds. In the United States, approximately 10% of the market is currently held by private individuals.

Bond market volatility For market participants who own a bond, collect the coupon and hold it to maturity, market volatility is irrelevant; principal and interest are received according to a pre-determined schedule.

But participants who buy and sell bonds before maturity are exposed to many risks, most importantly changes in interest rates. When interest rates increase (decrease), the value of existing bonds fall (rise), since new issues pay a higher (lower) yield. This is the fundamental concept of bond market volatility: changes in bond prices are inverse to changes in interest rates. Fluctuating interest rates are part of a country's monetary policy and bond market volatility is a response to expected monetary policy and economic changes.

Economist's consensus views of Economic indicator versus actual released data contribute to market volatility. A tight consensus is generally reflected in bond prices and there is little price movement in the market after the release of "in-line" data. If the economic release differs from the consensus view the market usually undergoes rapid price movement as participants interpret the data. Uncertainty (as measured by a wide consensus) generally brings more volatility before and after an economic release. Economic releases vary in importance and impact depending on where the economy is in the business cycle.

Bond investments Investment companies allow individual investors the ability to participate in the bond markets through bond fund, closed-end funds and unit investment trust. In 2006 total bond fund net inflows increased 97% from $30.8 billion in 2005 to $60.8 billion in 2006. Bond fund flows SIFMA. Accessed April 30, 2007. Exchange-traded funds (ETFs) are another alternative to trading or investing directly in a bond issue. These securities allow individual investors the ability to overcome large initial and incremental trading sizes.

Bond indices A number of bond indices exist for the purposes of managing portfolios and measuring performance, similar to the S&P 500 or Russell Indexes for stocks. The most common American benchmarks are the Lehman Aggregate, Citigroup BIG and Merrill Lynch Domestic Master. Most indices are parts of families of broader indices that can be used to measure global bond portfolios, or may be further subdivided by maturity and/or sector for managing specialized portfolios.

See also

Notes

External links



 

Bond Market



 
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