Presenter: Christopher Anderson MI, IA, IN and OR SMG Coordinator www.stockmarketgame.org www.investwrite.org www.smgman-mi.org

SMG Webinar: Buying Bonds Welcome Students!

Welcome Teachers!

I have questions for you to consider while I read the following topics. (see attachments)

All of these materials are located at www.smgman-mi.org

Click on “Trading in a Bear Market”

About Bonds Kinds of Bonds

Though bonds are considered a “lesser risk” than stocks, each bond type also has a different risk level when compared to each other.

U.S Treasury Bonds The safest of bond investing The most important bonds are the U.S. Treasury bills, notes, and bonds issued by the Treasury Department. They are used to set the rates for all other long-term, fixed-rate bonds. The Treasury sells them at auction to fund the operations of the federal government. They are also resold on the secondary market. They are the safest since they are guaranteed by the world's largest economy. That means they also offer the lowest return. They are owned by almost every institutional investor, corporation, and sovereign wealth fund. The Treasury also sells Treasury Inflation Protected Securities that protect against inflation.

Municipal Bonds Slightly more risk than U.S. Treasury Bonds

Municipal bonds are issued by various cities. These are tax-free but have slightly lower interest rates than corporate bonds. They are slightly more risk than bonds issued by the federal government. Cities occasionally do default.

Corporate Bonds Riskier than U.S. Treasury Bonds

Corporate bonds are issued by all different types of companies. They are riskier than government-backed bonds so they offer a higher rate of return. They are sold by the representative bank.

Now, I want to take you to a Stock Market Game Portfolio and buy a bond and take a look at an account I set up with all bonds in the portfolio.

Scroll Down to see an example of bonds in an Account Holdings