#bond yield

[asianbharatnews]

Gold Rate: मार्च में सोने की कीमतों में 17 साल की सबसे बड़ी गिरावट, जानें कितना है रेट

Gold Rate: नई दिल्ली: अमेरिका-ईरान तनाव के बीच वैश्विक बाजारों में उतार-चढ़ाव देखने को मिला, जिसका सीधा असर सोने की कीमतों पर पड़ा। मार्च महीने में सोना करीब 14.5% सस्ता हो गया, जो पिछले 17 वर्षों की सबसे बड़ी गिरावट मानी जा रही है। इससे पहले अक्टूबर 2008 में लगभग 16.8% की गिरावट दर्ज की गई थी। अंतरराष्ट्रीय बाजार में दबावअंतरराष्ट्रीय बाजार में सोने के दाम तेजी से फिसले हैं। कॉमेक्स पर सोना…

[aboutbussiness]

Understanding Bond Yield: How It Affects Your Returns

When I look at fixed income, the number that actually decides my outcome is bond yield—not the flashy coupon. Yield tells me what I’ll earn at today’s price after accounting for every rupee of cash flow until maturity. Two bonds can both carry an 8% coupon and still deliver very different results depending on whether I buy them at a premium or a discount. Without yield, I’m guessing.

I start with current yield (annual coupon ÷ market price), but I rely on yield to maturity (YTM) for decisions. YTM blends today’s price, all future coupons, and the redemption value into one annualised figure—the true, apples-to-apples return if I hold the bond to maturity.

A better, worked example

Take a two-year bond with ₹1,000 face value and an 8% annual coupon (₹80 each year).

Case A: Premium price (₹1,080). Current yield = 80 ÷ 1,080 = 41%.  YTM, which also factors in the fact I’ll only get ₹1,000 back at maturity, drops to ≈3.77%. Paying a premium and getting par at the end drags the return down sharply over just two years.

Case B: Discount price (₹950). Current yield = 80 ÷ 950 = 42%.  YTM, boosted by buying below par and still receiving ₹1,000 at the end, rises to ≈10.92%.

Same coupon, same issuer, same maturity—yet radically different yields because the price is different. That is why I never pick bonds on coupon alone.

Why yields move (and prices swing)

Bond prices and yields move like a seesaw: when market yields rise, prices fall; when yields fall, prices rise. The sensitivity of that move is captured by duration. Longer-dated or low-coupon bonds generally have higher duration, so their prices react more to rate changes. If I might need to sell early, I prefer shorter duration (or a floating-rate structure) to keep mark-to-market volatility manageable.

Credit also shapes yield. Corporate bonds usually trade at a spread over the sovereign yield to compensate for credit risk. If spreads widen—say, on weaker earnings or tighter liquidity—prices can drop even if policy rates are unchanged. When I compare bonds in india, I don’t chase the fattest spread blindly; I read the rating rationale, check leverage and interest coverage, and confirm where the instrument sits in the repayment waterfall and whether it is secured.

Structure and taxes matter

Embedded options change the yield math. Callable bonds are often redeemed early when rates fall, so I compute yield-to-call alongside YTM (a more conservative figure). Put options, step-up coupons, or amortising principals reshape cash flows; I match the yield measure to the structure I’m buying.

Taxes turn headline yield into real yield. Coupon income is taxed at my slab rate; capital-gains treatment depends on listing status and holding period. Before choosing between a 7.7% G-Sec, an 8.3% PSU bond, or a 9.1% NBFC debenture, I run post-tax YTM comparisons. Often the instrument with the lower headline number wins after taxes, costs, and liquidity.

How I use yield in practice

For date-certain goals, I build a ladder—say, two, four, and six-year maturities—so principal returns periodically and I average yields across cycles. When the rate path looks uncertain, I use a barbell: short-dated bonds for flexibility and a measured slice of longer tenors to lock attractive yields. If strong issuers offer floaters, I add them to keep income aligned with policy moves.

The takeaway is simple: bond yield is the compass of fixed income. By pricing every purchase on YTM (and yield-to-call where relevant), respecting duration and credit spreads, and thinking in post-tax, real terms, I turn a list of bonds in india into a portfolio that pays on time and stays on plan—no surprises hiding behind glossy coupons.

[anoopastrosutra]

Nifty Prediction : Sell on rise | Nifty may test 19675 | Pressure – global cues

Daily Forecast – Share Market – September 22nd, 2023 Sell on rise | Nifty may test 19675 | Pressure – global cues Mercury with Venus leads the day, well supported by Sun, Moon, Mars, Rahu, Ketu. Global cues Continue reading Untitled

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