Investing For Dummies

guaranteed-investment contracts (GICs)

two biggest determinants of what a bond should yield are its maturity date and its credit rating

Of the money that you want to invest in bonds, don’t put more than 5 percent into any one bond. That means that you need to hold at least 20 bonds.

Be especially careful about purchasing bonds that were issued at higher interest rates than those that currently prevail.

not all bonds make regular interest payments.

The U.S. government now offers bonds called Treasury inflation-protected securities (TIPS)

Treasuries are IOUs from the U.S. government. The types of Treasury bonds include Treasury bills (which mature within a year), Treasury notes (which mature between one and ten years), and Treasury bonds (which mature in more than ten years)

bonds are riskier than money market funds and savings accounts because their value can fall if interest rates rise.

Bonds are similar to CDs, except that bonds are securities that trade in the market with a fluctuating value.

Mutual fund companies can’t fail because they have a dollar invested in securities for every dollar that you deposit in their money funds. By contrast, banks are required to have available just 12 cents for every dollar that you hand over to them