Understand How Bonds Are Rated and Their Default Rate to Attract Prospects and Referrals

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I am not selecting on bonds. I feel they have their spot and are wonderful for any portfolio. If you assessment the bond section of this manual you can discover standard information.

The truth is that bonds have historically higher failure rates than folks recognize and you and your client want to know that there is exposure to loss when investing in bonds. Oftentimes a bond failure doesn’t in fact mean the bond is worthless. It could just mean a restructuring or a delay in an interest payment.

When a bond fails to make the interest payment the worth of the bond (how a lot it could be sold for) will decrease. The rating of the bond by bond raters (Moody’s) can also weaken and drop.


It is crucial to know how this could impact your prospects portfolio and it could strengthen the want for far more safety and security that an annuity can supply.

This is standard info relating to bond defaults and failures by category:

* U.S. Treasury: no likelihood for default.
* Municipal bonds: investment grade bonds that have a really slight likelihood of default (one analysis showed much less than .05% over a 30-year period).
* Corporate bonds: investment grade bonds have a higher risk, but are still low.
* Junk bonds: below investment grade and have much greater risk.
* Foreign bonds: may have a high risk.
* Unrated bonds: Highest risk of all.

The lower the rating the higher the likelihood of a bond default or failure.

Here are numerous sources for discovering further data about bonds:

* Moody’s
* Normal and Pour’s
* Bloomberg
* Bond Default Newsletter

My preferred is Moody’s. They will supply a bond default list that has enormous details accessible to us and it is free of charge. Just log on and go to the ‘Watch List’ and you will be amazed how several businesses I know effectively are on this list.

Using This Info Is About Being Informed.

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