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10.01.2014, 06:19

and secondary marke

and secondary markets for buying and selling of bonds The primary market is where bonds are issued and sold by the issuer directly to the investing public,Nike Air Jordan Retro Homme, and the basic merit last week,Air Jordan Retro Pas Cher, we proceed to discuss how to buy and sell bonds But before this it is important to know that there are also risks to investment in bonds The greatest risk is inflation general increase in prices of goods and servicesAssuming you invest N10 000 in a five year bond the reality is that within those five years prices of goods and services may have risen significantly such that what N10 000 can buy at the time you invested in the bond you may need N15 000 to buy it by the fifth year when the bond maturesThe implication is that though you get your money back with interest but the value is not the sameThere is also the risk that the bond issuer may have problem repaying the bond Though this risk is minimal or almost non-existent in government bonds it could happen if it is a company that issued the bond Also there have been instances where governments had difficulty repaying their loans A good example is Greece which has been under severe economic problem in the last three years So take note that investment in bonds has its risk and this depends on the type of bondsWith respect to type of bonds the basic ones are Sovereign bonds State bonds Municipal bonds and Corporate bondsSovereign bonds are issued by the federal governments while state bonds are issued by state or regional governments local government bonds are issued by local government and corporate bonds are issued by companies Corporate bonds are also referred to as Debenture or Industrial loan The most important thing is that they are all debtsIn Nigeria the most dominant type of bond is the Sovereign bond also known as FGN Bond? had it that an agreement was reached to allow Jonathan to

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