Your Retirement Playbook

Your Retirement Playbook


What Happens When Your Bond Reaches Its Maturity Date

January 27, 2021

One of the reasons that Wall Street loves bonds is that they mature. Then, you have to redo something with capital. About 68-70% of the market is actually driven by bonds. You would think that the stock market is larger; however, it’s not. Bonds mature, they die, then capital needs to be replenished. Here’s more about the lifespan of a bond: An organization needs to raise capital. So, they raise capital through bonds. Throughout that time, they also give coupons. Once the bond is issued, people can buy it. When you buy it, you own that bond until it matures. At that point, you are given back the principle and whatever coupons were promised. The coupons are paid; they don’t accumulate. What happens inside of the bond arena? Wall Street really does not care who gives them the money for that bond. They are looking for the most amount of capital they can get. The companies that issue the bonds are not interested in the lower tax bracket. Instead, they are interested in people who have all of the cash. Generally, they want people who can write big checks. 68% of bonds are never sold. In the world that we live in today, we are able to buy bonds of any duration (the risk you deal with). You are able to buy bonds that mature at different times in different baskets. When should you buy a bond? Well, it depends. Be cautious about what is going on around you, and know what you are trying to accomplish in the long-run.   Connect with Financial Enhancement Group: Visit our Facebook page at www.Facebook.com/FinancialEnhancementGroup Join our Facebook Group at www.yourlifeafterwork.com/FinancialTidbits Visit our website at www.yourlifeafterwork.com   We would love to answer your questions on air! Call Angi at (800) 928-4001 or send them to TalkToFEG@yourlifeafterwork.com