What You Should Know

Investor's Checklist

What are my investment goals?

1.    To provide income to use toward my current expenses?

  • Yes
  • No

2.    To save for retirement?

  • Yes
  • No

3.  To save for children’s school or university education?

  • Yes
  • No

4.  To accumulate capital?

  • Yes
  • No

5.  To preserve capital?

  • Yes
  • No

6.  Other (such as a short-term goal):

Perspective:

Because bonds typically have a predictable stream of payments of interest and repayment of principal, many people invest in them to receive interest income or to preserve and to accumulate capital. If you are looking for current income, you will most likely be interested in bonds that pay an interest rate that stays fixed until maturity with interest that is paid semi-annually. However, if you are saving, you may wish to consider investing in zero coupon bonds which do not have periodic interest payments. Instead, they are sold at a substantial discount from their face amount and the investor receives one payment--at maturity--that is equal to the purchase price (principal) plus the total interest earned, compounded annually or semi-annually at the original interest rate.

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