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THE
FUNDAMENTALS
OF BOND
MARKETS
Toby Mitchell, Stifel
Introduction
■ AsVice President/Investments with the CR Wealth Management
Group at Stifel,Toby Mitchell provides tailored services that enable
high net worth clients to pursue highly targeted objectives.Toby
Mitchell engages individually with Stifel clients in clearly
identifying their goals through retirement and beyond and works
to place assets in areas such as equities and bonds.
With access to a broad array of investment options, defining the
ideal allocation strategy is a process that encompasses factors
such as income, safety, and growth expectations. While no
investment pathway is completely secure, the acquisition of blue-
chip corporate bonds and reputable government-issued securities
seemingly offer a high level of predictability. Providing a specified
yield parameter, money market offerings, such as certificates of
deposit andTreasury bills, offer yields that are stable but often do
not keep pace with inflation.
Bond Markets
■ Risks taken can be finely tuned, with grade AAA bonds offering
relatively low income returns and A or AA implying slightly more
risk and thus increasing the yield. BBB-rated bonds are of medium
risk and see a correspondingly higher investment payout.There is
a wide spectrum of relative risk within bond markets, with junk
bonds riskier than many speculative equities. Because of the
likelihood of default involved, they also offer the highest potential
yields.
There are significant risks associated with bonds, and they are not
suitable for all investors.You could lose all or a substantial amount
of your investment.
When investing in bonds, it is important to note that as interest
rates rise, bond prices will fall.
■
Stifel, Nicolaus & Company, Incorporated | Member SIPC &
NYSE
1095Avenue of the Americas
3rd and 4th Floor
NewYork, NewYork 10036

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The Fundamentals of Bond Markets

  • 2. Introduction ■ AsVice President/Investments with the CR Wealth Management Group at Stifel,Toby Mitchell provides tailored services that enable high net worth clients to pursue highly targeted objectives.Toby Mitchell engages individually with Stifel clients in clearly identifying their goals through retirement and beyond and works to place assets in areas such as equities and bonds. With access to a broad array of investment options, defining the ideal allocation strategy is a process that encompasses factors such as income, safety, and growth expectations. While no investment pathway is completely secure, the acquisition of blue- chip corporate bonds and reputable government-issued securities seemingly offer a high level of predictability. Providing a specified yield parameter, money market offerings, such as certificates of deposit andTreasury bills, offer yields that are stable but often do not keep pace with inflation.
  • 3. Bond Markets ■ Risks taken can be finely tuned, with grade AAA bonds offering relatively low income returns and A or AA implying slightly more risk and thus increasing the yield. BBB-rated bonds are of medium risk and see a correspondingly higher investment payout.There is a wide spectrum of relative risk within bond markets, with junk bonds riskier than many speculative equities. Because of the likelihood of default involved, they also offer the highest potential yields. There are significant risks associated with bonds, and they are not suitable for all investors.You could lose all or a substantial amount of your investment. When investing in bonds, it is important to note that as interest rates rise, bond prices will fall.
  • 4. ■ Stifel, Nicolaus & Company, Incorporated | Member SIPC & NYSE 1095Avenue of the Americas 3rd and 4th Floor NewYork, NewYork 10036