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 included with your Bondsavvy subscription.