The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Bonds & Fixed Income Investments

URL:  https://boards.fool.com/correct-called-is-the-same-as-paying-off-your-car-27699078.aspx

Subject:  Re: California Bonds Date:  5/23/2009  12:41 PM
Author:  AngelMay Number:  27609 of 36766

Correct, called is the same as paying off your car early; dividends come to an end an you get face value. If you bought at a premium you will lose the difference between paid price and face value, this would be true if the bond ran all the way to maturity. Early call can bite your returns especially if you paid a premium planning your yield based on maturity. On callables we check Yield to worst.

jack

----------------------


Ummmmm - what determines "face value" (since you say that changes).

When my CD matures, I get my initial investment back.
But when my bond matures (or is called) I don't?

Sounds a little bit iffy.

AM
Copyright 1996-2020 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us