Investing for Beginners: Investing in Bonds
BOTS wants to make sure that everyone in the world has the opportunity to build a second, passive income through investing. But, not everyone has experience with investing - which can make it all look a bit daunting. So that's why we've decided to share as much information as we can in our "Investing for Beginners" series!
Investing for Beginners
Last time, we shared more information about stocks in our “Investing for Beginners” series. It was all about the types of stocks and why people decide to invest in these stocks.
You can read the entire article here.
Today, we will focus on investing in bonds: what types of bonds are there, and how can you profit with them?
Investing in bonds
Investing in bonds is often seen as a relatively safe form of investment. But what exactly is a bond?
In short, a bond is a loan issued by a government or a company. You lend your money to this company or government and receive interest for it. Just like shares, you can also trade bonds on the stock exchange.
Types of bonds
Although there are several types of bonds, we won’t waste too much of your time and focus on the two most common types of bonds.
Government bonds: A government mainly issues government bonds to cover shortfalls in funding or budget. Because governments generally do not go bankrupt that easily, government bonds are seen as the least risky type of bond.
Corporate Bonds: As the word suggests, corporations issue corporate bonds. The interest and repayment depend on the creditworthiness of the respective company, and for that reason, these bonds are seen as riskier investments than government bonds.
Why invest in bonds?
There are two ways you can make a profit when you invest in bonds. This can be done through the coupon interest rate and the price.
Coupon interest: When you buy a bond, you lend your own money. You will receive compensation for this. This is called the coupon rate. The amount of this interest depends, among other things, on the creditworthiness of the company or government from which you buy a bond. The maxim here is often: if there is a good chance that the company or the government can repay the bond, the lower the coupon rate is. This interest can be fixed or variable.
Price gain: Suppose you buy a bond on the stock exchange, you pay a specific price. This rate is expressed as a percentage. This price depends on, for example, the company’s creditworthiness or the government that issues the bond, but also, for instance, on the market interest rate and the prevailing sentiment at that time. As a rule, you can say that if the creditworthiness drops, the price of the associated bonds will drop with it.
The BOTS app and bonds
The BOTS app currently focuses on investing in cryptocurrency (more trading options will come soon!): but we cut out the middle man. We’ve reinvented automated trading and put it out there for anyone to profit from. The BOTS app uses bots that do all the work for you. All you have to do is pick a bot, invest the funds, and be patient!
But how can you trust these bots? The bots in the BOTS app are developed by specialized developers and work through algorithms, artificial intelligence and machine learning. As a result, there is no more need for a (digital) fund manager. This means that you don’t have to pay for the costs of one, either.
The return that a bot achieves is significantly higher than the returns that a human might achieve. Why? A bot doesn’t eat, sleep, take pee breaks or gets stressed out when the market dips. This means that a bot can respond to changes in your crypto fund right away: no matter the hour.
And there you have it, in a nutshell: how we made investing with higher returns available for everyone. All you need to get started is 2 minutes and € 50-.
BOTS is a tech company that has developed an app that makes it possible for anyone to start investing. You only need €50 to get started. BOTS uses automated trading strategies based on algorithms. We call these algorithms bots. These bots are tiny superheroes: they make automated investing accessible to everyone. With their help, you can invest in cryptocurrency within minutes — without any knowledge! And we’ll do you one better… In 2021, you’ll also be able to invest in stocks and other currencies through the BOTS app.
The app is free to download and quick and easy to install. BOTS currently operates in more than 15 countries, and by the end of the year, BOTS wants to be active in at least 60 countries and four continents.
Need any help with anything?
Even though automated investing is incredibly easy, you might need some time to find your way around the app and discover all the options. So if you still have questions wandering around your mind, or you just can’t seem to figure it out, please do not hesitate to contact the BOTS support department.
Don’t feel like calling our support team? Just head to the BOTS YouTube channel and browse through the dozens of instructional videos that may help you further. You are also royally invited to the BOTS Discord channel.
Ready to get started?
There is no such thing as risk-free trading. It is possible to lose (part of) your stake.