For all those of you who are not happy with the high amc charges of debt funds, buying bonds is a good idea (oops I am not buying, I am not a bond investor, I prefer equities).
With interest rates stagnant – and perhaps moving south (I have no interest call ever) bonds may become an interesting option for some investors. Though I am not a great lover of bonds, I do hold some in my Dad’s portfolio. If you are investing in bonds, look out for the following:
1. Are there call and put options – if so European or American. If at intervals, what is the frequency.
2. dates of interest payments
3. Credit rating – higher the better, do not go below any particular level – make your choice.
4. Tax implications – interest or capital gains. Backed by legal opinion or by a court ruling
5. If there is any novel feature that you cannot understand, ASK the issuer
6. Norms for multiple application – will it be rejected or treated separately?
7. Interest on application money?
8. Direct credit to bank – for interest, redemption, etc.
9. Rate of interest
10. Do not expect too much of secondary market liquidity, it does not exist.
11. All my friends, relatives who bought those 9% bonds.. are now THRILLED..
10. Size of issue etc.
Post Footer automatically generated by Add Post Footer Plugin for wordpress.