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BondsBonds are fixed-income investments that allow individuals to lend a specific amount of money to a large entity, like a government or corporation, for a set amount of time in return for interest that pays out over the life of the loan. Their main function is to help these large entities finance projects and business ventures. While they’re seen as predictable investments, the returns are often less lucrative than other investment options, like stocks. There are three main types of institutions that issue new bonds: government, corporate, and municipal. Each sells its own types of bonds, which have their own functions, rules, and rates.Explore Bonds
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Although PFAS, or forever chemicals, are intentionally designed to be extremely stable and long-lasting because of their strong carbon-fluorine bonds, these bonds can be broken by heat, plasma, and supercritical water. SciShowHow chemical bonds between atoms form molecules and large geometric structuresIn ionic bonding, one atom transfers at least one electron to another atom, forming two atoms of opposite charge. These atoms attract one another and can stack up in a 3D grid called a lattice. Covalent bonding, where electrons are instead shared, can produce enormous molecules, such as the two found in human chromosome 13, which each contain 37 billion atoms. TED-EdThe outermost shell of electrons in an atom dictates how it bonds to other atoms, including those of the same element, and the properties of the materials composed of those atoms. Arvin AshLocal governments borrow money for long-term projects by issuing municipal bondsWhen a city needs to build a school, a road, or a water treatment plant, it usually issues a municipal bond—borrowing money from investors to be paid back over time. The market for these bonds now exceeds $4T. Tax Policy CenterCompanies sometimes issue corporate bonds to raise capitalThese bonds offer investors regular interest payments in addition to the return of the principal amount at maturity. They allow companies to raise capital without losing ownership. InvestopediaElectricity is produced when the ends of a battery are connected by a conducting wire, triggering chemical reactions that release the energy stored in chemical bonds. Engineering MindsetThe US government is legally allowed to borrow money from the Social Security Trust Fund surpluses as long as it issues Treasury bonds to the Trust Fund in return and repays those bonds with interest when Social Security needs the money to pay benefits. Center on Budget and Policy PrioritiesHow the World Bank's pandemic bonds were triggered during COVID-19In 2017, the World Bank raised a chunk of emergency funds through bonds to help developing countries cover funds in the event of a pandemic. Had no pandemic occurred, investors would have received returns of 6% to 11%. But the global pandemic meant they lost all their money. UK GovernmentWhen compared to stocks and bonds, alternative investments are often less regulatedAlternative investments are also often less liquid than traditional investments; they carry unique risk, return, and tax considerations. Harvard Business SchoolMost plastics are not biodegradable because breaking their chemical bonds requires temperatures lethal to most microbes, and these organisms have not been exposed to plastic long enough to evolve the necessary enzymes.Ideonella sakaiensis, a bacterium found in recycling plant sludge in 2016, was the first organism seen to possess enzymes that could break down PET, a type of plastic. Researchers continue to search and try to bioengineer microbes that can digest other plastic types. TED-EdAre I-Bonds a good investment?I-Bonds are savings bonds issued by the US government that can help protect savings from inflation. While that sounds positive, I-Bonds have a few disadvantages, too—for instance, these bonds have to be held for at least a year before you can cash out. KiplingerWhat are baby bonds?In 2008, Hillary Clinton proposed giving every US newborn a $5,000 government-funded trust, often called a “baby bond,” to help low-income families build long-term wealth. Supporters said it could reduce wealth inequality, while critics argued existing programs like the Child Tax Credit offered similar benefits. 1440The bond market is where bonds and other debt securities are tradedBonds are fixed-income investments allowing individuals to lend a specific amount of money to a large entity, like a government or corporation, for a set amount of time in return for interest paid out over the life of the loan. The bond market is widely considered a key economic barometer. NerdWalletTreasury bonds, notes, and bills are critical vehicles for the federal government to raise money for public expenses and manage the national debtFor investors, they're all usually considered low-risk options since they’re backed by the federal government. InvestopediaSeries I bonds are a form of government savings bonds created to shield your investments from inflationSpecifically, I bonds earn interest from both a fixed rate and an inflation rate. This article explains who might benefit from investing in I Bonds—for instance, people seeking to invest savings they do not need to access in the near future. EllevestThe 60/40 method says to allocate 60% of your portfolio to stocks, and 40% to bondsThe 60/40 method used to be the golden rule when planning for retirement, as stocks are more lucrative and bonds are more reliable. However, it isn’t necessarily the go-to recommendation anymore. US NewsA bond ETF lets someone invest in multiple bonds through one single fundThere are risks, there are also major perks to buying a bond ETF, like the ability to purchase bonds on the stock market. BankrateZero-coupon bonds have no regular interest dates over the length of the loanInstead, they pay all the interest at once when the bond hits its maturity date. These bonds aren’t the right investment for everyone, but they do carry some pros, like a lower initial investment cost. KiplingerIf the US government paid off its debt, it could disrupt the entire bond market, as Treasury bonds are among the most common bonds for investors and the majority of the national debt is in bonds.One reason: bonds. Treasurys are some of the most common bonds for investors, plus the majority of the national debt is in bonds. Which means if the US government paid off its debt, it could disrupt the entire bond market. To explore the reasons why the US government is unlikely to pay off its debt—and what impact that could have on the economy—watch this video. CNBCInvestors trading their municipal bonds can't use the same method to purchase themInstead, they’ll have to go through the secondary market, which has its own set of rules and steps to follow. An illustrated, explanatory video can help you learn how to sell your municipal bonds for the best market value. Fidelity InvestmentsInvesting in bonds comes with a few risksThink: changes in interest rates that impact the bond’s value, or a bond issuer completely defaulting on a loan. There are steps investors can take to lower their initial and future risk when investing in the bond market, such as checking a company's bond rating before investing. KiplingerThe US Government sells two types of savings bonds: EE bonds and I bondsEE bonds have fixed interest rates that the buyer is informed of when they purchase the bond. I bonds, however, earn a rate that can change every six months. A comparative chart details the most significant differences between EE bonds and I bonds. TreasuryDirectInvestors can buy three main types of bonds: government, corporate, and municipalEach type has variations of its bond offerings with different interest rates, loan lengths, maturity dates, and terms. Each type also carries its own risks and rewards. Investor.govThe difference between stocks and bondsWhile more people invest in stocks than bonds, experts say owning both can make for a healthier portfolio. Stocks are considered a riskier investment than bonds, but tend to have higher returns. While bonds might be the safer option, they won’t grow your wealth as quickly. The Wall Street JournalDespite functioning as guarantors for people who can't make bail, courts rarely require bond companies to cover the full forfeiture of unmet release conditions. The Economics of Everyday ThingsWalt Disney World essentially ran its own local government for more than 50 yearsDisney's Reedy Creek Improvement District granted the company county-level authority to construct roads, issue bonds, and self-regulate for decades. Florida Governor Ron DeSantis dissolved the arrangement in 2023 after a public dispute with the company. NBC MiamiTranches slice financial products into segmentsSpecifically, tranches are slices of securities (think: bonds or mortgages) divided by risk and characteristics to attract different investors with a variety of risk tolerances. InvestopediaThe chlorophyll in plants captures energy in the form of red and blue lightLight-dependent reactions during photosynthesis convert sunlight into chemical energy, stored within the bonds of molecules such as ATP and NADPH. Rather than being absorbed for these reactions, most green light is reflected, causing most plants to appear green. National GeographicVisualizing the world's $261T in investable assetsNearly half of the world's portfolio of stocks and bonds originate in the US. Roughly 1% of all investable assets are in the form of cryptocurrency. Visual CapitalistThe movie adaptation of ‘The Big Short’ provided a visual for the 2008 housing bubbleA scene from "The Big Short" visualizes how Wall Street bundled shaky mortgages into complex housing bonds and sold credit default swaps on top of them—showing, step by step, how the structure of the 2008 housing bubble was vulnerable to collapse. YouTubeDeep sea fish rely on a molecular strengthener to prevent being crushedTrimethylamine N-oxide (TMAO) stabilizes hydrogen bonds and prevents water and proteins within organisms from being misshapen under immense pressure. Compounds called piezolytes protect cellular membranes from being crushed in regions like the Mariana Trench, where pressures are 1,100 times greater than surface atmospheric pressure. IFLScienceSynthetic diamonds may be used to cool microchipsThe strong carbon bonds in diamonds efficiently carry vibrations, allowing them to conduct heat several times faster than copper, a metal commonly used in heat sinks. AI and high-performance computing have pushed researchers to investigate alternative materials for cooling solutions. The New York TimesConditioners can help unshrink garments by lubricating fibersTextile fibers relax and shrink due to heat and moisture, disrupting hydrogen bonds. While loosely knitted fabrics are more prone to shrinkage than tightly woven ones, synthetic fibres like polyester resist shrinkage due to their crystalline structure. ScienceAlertPeople often invest in alternative investments to diversify their portfoliosBecause alternatives often have little correlation with traditional investments like stocks and bonds, adding them to a traditional portfolio can reduce its overall risk exposure. PrequinAlternative investments can include everything from cryptocurrency to fine artThe financial assets typically fall outside the scope of traditional investments like stocks and bonds, and they’re often intended to diversify investor portfolios. InvestopediaThe New York Stock Exchange wouldn't have been made if not for municipal bond salesThe Funding Act of 1790 nationalized and consolidated the debt held by the 13 colonies to be sold off in the form of bonds. New York Stock ExchangePlay a game that reveals if investors with a crystal ball make better tradesThe "crystal ball" game reveals how well you would do trading stocks and bonds if you could see the front page of the Wall Street Journal one day in advance. Elm WealthWatch a former CIA deputy director rate spy gadgets from movies and televisionDawn Meyerriecks, former CIA deputy director of science and technology, examines the realism of gadgets, including James Bond's weaponized Aston Martin, climbing gloves from the Mission: Impossible franchise, and the briefcase and listening device from "The Americans." InsiderHollywood helped fund American military activity by boosting bond salesTo help fund its WWI military activity, the US introduced Liberty Bonds—government-issued debt marketed directly to the public. Starting at $50, the campaign targeted working Americans and offered Thrift Stamps to make bond-buying more accessible. Hollywood led the charge, with stars like Charlie Chaplin and Mary Pickford boosting bond sales. 1440The Yale model of investment allocation, explainedCollege endowment managers long held to the traditional allocation of 60% domestic stocks and 40% bonds. But Yale’s David Swensen developed a new approach: deprioritizing low-risk fixed income and liquid assets in favor of alternative investments to leverage endowments' long-term investment horizons and capture the “liquidity premium.” ChronographExplore a step-by-step guide for getting started as a retail investorInstead of purchasing individual stocks and bonds, new investors may want to start in funds that track an index—like the S&P 500—or that hold a group of themed stocks. BankrateAround the world, marriage plays an important role in bolstering social stabilityMarriage was around in one form or another long before written history. From bonds between two people to large polyamorous gatherings of spouses, the rich history of marriage practices demonstrates that partnerships have been, and will likely continue to be, incredibly diverse. TED-EdSnowflakes form when water vapor turns directly into iceEvery water molecule has a slightly bent shape due to electron repulsion and regularly forms bonds with hydrogen molecules. When they freeze, they form a six-sided (or hexagonal) lattice, resulting in the six-sided symmetry of snowflakes. As the snowflake falls, more water molecules freeze onto its six sides, forming the unique, beautiful geometric designs. TED-EdMutual funds and taxesWith mutual funds, you can expect a similar tax experience to that of bonds and stocks, although there are a few key differences. Look out for potential taxes on any capital gains or dividend earnings. The Wall Street JournalMutual funds are a type of shared investment strategy that pools moneyMutual funds can invest in stocks, bonds, or other types of securities. This method is a popular way for investors to diversify their portfolio with less risk, making it ideal for long-term financial goals (like retirement). BankrateConnecticut recently became the first state to create and launch a baby bond program, a government-funded savings or investment account that is seeded when a child is born.Connecticut recently became the first state to create and launch a baby bond program, which invests $3.2K for a baby born after July 2023, who is covered by the state’s Medicaid program. When the child turns 18, they can use the funds for college, retirement, to buy a home, or invest in a business. Listen to this podcast episode that discusses the impact a program like this could have. VoxBond yields are the returns investors earn from a bond's interest—and they're a key economic barometer.Bond yields are the returns investors earn from their bond’s interest. They’re considered a major indicator of how the US and global economies are doing, and where they’re headed. When bond yields increase, this tends to mean the cost to borrow money is also increasing. This video breaks down why bond yields matter so much to investors, and how they play a key role in evaluating the health of the economy. The Wall Street JournalThe bond market dates back to the 1100s in VeniceIn the early 1800s, bonds were used to fund US railroads and canals in Great Britain. “Liberty Bonds” were sold during both World Wars in the 20th century. Learning about the early and modern history of bonds can offer a glimpse into how the modern bond market came to be. Markets.comThe financial crisis in 2008 had a major impact on many 401(k) plansAmid the 2008 financial crisis, stocks and bonds cratered as the broader market floundered due to the subprime mortgage crisis. Investors with so-called "target-date" funds—which shift allocations based on the maturation of a fund—shared in the slump, with some funds declining by 20% or more just a year or two away from maturation. CNBC The Fed can use quantitative easing to stimulate growth once it has lowered the federal funds rate as far as it can goThis involves purchasing large-scale assets from banks beyond just Treasury bills and bonds. This effectively gives banks much more liquidity, with the hope that they will actively lend it out at cheaper rates and expand the economy. But quantitative easing runs the risk of sparking inflation. The Plain Bagel
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