As the volatility of the investments increase in the stock markets there is always a rise in investments in the fixed assets such as bonds and mutual funds and fixed deposits which are generally termed as more secure and less volatile than the stocks which can just flip over at any second without even prior warning, which makes bonds a good alternative to these volatile investments.
The company’s are being targeted as they are borrowing bonds and robbing the investors off their yields and gains that were promised as secured and assured at the time of making the investments. The companies are also borrowing through various other fixed investments that are made by the investors in lieu of getting a fix yield and a guaranteed return on the investment. The secured bonds are becoming not so secure as the companies are now taking advantage of these investments in bonds for their own profits and keeping the investors at bay from getting their promised share of gains and profits. The companies redeem the secure based on what type of company they are, If it is a manufacturing company, it simply sets aside a portion of its physical assets, such as its buildings, property, plant and machinery. If the need arises, the company could sell those when your bonds mature and pay you off. But in the case of financial companies, these companies borrow money for the sole purpose of lending money to others. The onward lending then becomes a sort of security for the previous loans taken.
Investments are becoming more and more risky and this is causing major loss to the finances in the economy.
Tags : Bonds, secure investments, volatility, mutual funds, stocks,