What Happens To Bonds and Annuities If Interest Rates Rise

Just a simple rate movement over time of 3% (3.25% discount rate) would reduce the actual value of all inforce US Treasuries by as much as 40% of their market value. Think what would happen if interest rates went even higher? Disaster would loom and trillions of dollars would evaporate if these assets were liquidated. Of course there would be a winner: the US Taxpayer. Treasuries would be replaced with a higher earning interest rate bond, but at a far less value a third of its market value of the original bond.

By |2019-02-19T16:02:25+00:00May 8th, 2019|Annuities, Bonds|

Three Things To Know Before Buying Municipal Bond Insurance

The attraction to owning municipal bonds is twofold, limited exposure to loss and tax advantage interest. Many bond owners also purchase insurance on their bonds to ensure safety and security are part of the equation. With the financial meltdown from 2008, concern over exposure to loss has become more and more critical to investors. If [...]

By |2019-02-19T20:00:48+00:00February 4th, 2019|Bonds|

Are Municipal Bonds Really Tax Free?

Are municipal bonds tax-free?  Might want to make sure. Municipal securities, also known as "munis," are bonds issued by governmental entities such as states, cities, counties, and other organizations. The bonds are sold to raise money for public interest projects such as schools, bridges, roads, and other municipal construction needs to benefit the public. Like [...]

By |2019-02-19T20:06:32+00:00February 2nd, 2019|Bonds|

What Interest Rate Do Bonds Pay?

If an investor is thinking of investing in bonds, the first rule to learn is: a bond is nothing more than a debt instrument, a loan. Think of buying a bond like making a loan to a corporation, government, federal agency or other organization. Bond issuers understand that investors are not going to invest without [...]

By |2019-02-19T20:07:26+00:00February 2nd, 2019|Bonds|

Municipal Bonds: Basic Information You Need

Are Municipal Bonds Really Income Tax Free? Overview Of Municipal Bonds Municipal bonds (also known as “munis”) are attractive to many investors because the interest income is exempt from federal income tax and in many cases, state and local taxes as well. Also, munis often represent investments in state and local government projects that have [...]

By |2019-02-21T15:29:02+00:00January 16th, 2019|Bonds|