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Author: Geoffrey

What is the Difference Between OTC and Exchange Traded?

There are two basic structures to financial markets. Exchanges are centralized, formal, locations where securities are traded, whereas OTC is less formal and decentralized. There are reasons to navigate either one, but first it is essential to know the basic differences. Exchanges When you hear the term New York Stock Exchange (or the acronym NYSE), you may wonder where the word “exchange” came from. Naturally, it makes sense that it’s called this since it is a place, of sorts, where people buy and sell things. Originally, the NYSE, and other exchanges like it were physical locations where financial products...

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What To Do With Old Savings Bonds

“My Grandpa left me some savings bonds that he invested in many years ago when I was young. I am not sure what they are up to these days, I wonder if they are still earning any interest or if I should cash them in…” I have personally asked these questions and I know several people who have asked these same questions. When you are given bonds at a young age, it is natural not to understand how they work. If they are something that your Grandpa gave you, then chances are it was a savings bond. Savings Bonds...

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When Will the Bond Bubble Burst?

Since around 2009, monetary authorities around the world have been keeping interest rates extremely low (near to zero) in order to stimulate economic growth. Low interest rates mean that it is cheaper for people (including businesses and governments) to borrow money. This sounds like a great thing. Why do we not always keep interest rates low in order to facilitate this? The problem is with inflation. Having long terms of low interest rates will cause our currency to appreciate as more people have more money to spend. When interest rates are high, people tend to save more than they...

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Where Do I Buy Bonds?

If you are new to bonds, or even if you know a fair bit about them, you may wonder where someone actually gets their hands on a bond and which method for purchasing bonds is preferable (or easier). Government You can buy and sell U.S. Treasury Bonds directly from the U.S. Treasury on their website through regular auctions. There are no fees here like there are if you were to purchase them through a bank or a broker. Although this is the more attractive option, there are several reasons why you might consider using a broker. If you are...

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4 Bonds That You Should Know About

In several posts lately, we have been talking a lot about bonds: What are they? What sort of risks are involved? Why should you chose them? The subject of bonds is incredibly complex and important. We plan to continue talking about them. But before we go further, let’s make sure we understand what we are working with. Knowing what a bond is is a greats start if you are new to the subject, but assuming that you know as much, let’s dive into each type a little deeper than before. This will be valuable to any investor considering bonds,...

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