Hi, everyone. This is Steve Shaw, Founder and President of BondSavvy. Thanks so much for joining this 'How To Invest in Corporate Bonds' video.
I founded BondSavvy because individual corporate bonds are safe, high-return investments, but very few investors understand how to invest in bonds.
I want to change this.
Corporate bonds provide a reliable income stream and opportunities for capital appreciation. Investors, especially those seeking safe investments for retirement income, have often relied on stock dividends for investment income. While this worked when the stock market had high returns, huge downswings in stock prices -- such as those during Q4 2018 -- have caused dividend income to be wiped out. In addition, companies such as GE have reduced their once-significant dividends to either zero or close to zero, a fate that has happened all too often to stock dividend investors.
Bondholders enjoy a contract between the bondholder and the issuing company, which provides safety and security that stockholders do not have. A company must pay bondholders semi-annual coupon payments and return an investor's principal at maturity. These requirements help protect a bondholder's downside and reduce a bond's price volatility relative to stocks.
Bonds are senior to stocks in a company's capital structure. This means that, if a company files for bankruptcy, bondholders and other creditors are paid first, with stockholders often receiving nothing. Due to their safety and opportunities for high investment returns, we consider corporate bonds to be among the best retirement investments.
Unfortunately, even with these and other advantages, less than 1% of United States investor assets are held in individual corporate bonds. Many believe it is too complicated to invest in bonds. Many financial advisors and RIAs fall in to the same camp and typically lack any knowledge about bonds and how they work. They still, however, charge high financial advisor fees to place investors into underperforming fixed income mutual funds, which serves the financial advisor and bond fund well, but not the end investor.
BondSavvy's goal is to make corporate bond investing accessible and understandable, so investors of all sizes can make high-return investments in individual corporate bonds. BondSavvy presents between 20 to 25 corporate bond investment opportunities each year where we review each issuing company in detail, including its financial performance, growth trajectory, and credit analysis. All investment opportunities are at the CUSIP level, so investors can compare a bond issuer's credit quality with the specific bond's yield to maturity and price. We present these recommendations during The Bondcast, a subscriber-only webcast. In addition to presenting new corporate bond investment opportunities, BondSavvy has created a Corporate Bond Investing 101 video, which is free if you subscribe to BondSavvy.
|0:00||1||Bond Investing Made Simple|
|0:56||2||High Return Bond Investments|
|2:04||3||Vanguard Bond Fund Returns|
|3:06||4||Individual Bond Investment Returns|
|3:47||5||Fixed Income Investing Strategy|
|10:32||6||Understanding Bond Investing|
|11:01||7||Bond Investment Webinar Agenda|
|13:34||9||How Big Is the US Bond Market?|
|16:23||10||AAII Asset Allocation Survey|
|17:59||11||iShares AGG ETF Returns|
|18:59||12||Why Own Actual Bonds Rather Than Funds?|
|20:50||13||Five Myths of Corporate Bond Investing|
|21:44||14||Bonds Minimum Investment|
|24:27||15||Bond Prices for DIY Investors|
|29:47||16||Low-Cost Bond ETF Returns|
|31:28||17||Best Fixed Return Investments|
|35:33||18||Interest Rates' Impact on Bond Prices|
|38:17||19||After-Tax Bond Returns|
|39:57||20||Corporate Bond Bid-Ask Spreads|
|43:46||21||Review of Depth of Book|
|44:07||22||Individual Bonds vs. Mutual Funds|
|47:22||23||BondSavvy’s Value Add|
|48:18||24||Narrowing Down Bond Search Results|
|50:34||25||Corporate Bonds Example|
|54:19||28||High Yield Bonds Analysis|
|1:03:13||31||Before you invest…|
BondSavvy believes owning individual corporate bonds can help investors achieve higher returns and better principal protection than bond funds. We make 25 to 30 bond-level recommendations annually for the below client groups. Click a box to learn more.