Bond Market Introduction

Bonds or securities are similar to the loans and debts. Bond buying is actually lending money to a government, corporation, federal agency, municipality or any other agency that has issued the bond. Here, the person buying the bond is a lender and issuer of the bond is the borrower. The borrower agrees to replace them in due course with identical securities and the lender retains risks/returns of the securities in the meantime

Bonds are the core element of the number of investor’s financial plan. This is because bonds are long term investments that have a predictable stream of payments, repayment of the face value and secured returns along with the interest. So, this the major source for the investors to preserve and increase their capital. And it does not include any risk. This is the best solution for those who wants to invest or savings for their retirement or for their child’s future. (e.g. Education, marriage etc.)

Buying and selling of bonds is occurs at financial market, which is also termed as Bond Market. In 2006, the estimated value of the International Bond Market was around $45 trillion. In United States, the bond market is fully centralized. But this is not the case in several countries. The largest centralized bond market in the world is the New York Stock Exchange, which mainly represents the corporate bonds. The total bond market in the year 2006, in United States was $25.2 trillion.