[00:00:00] Welcome to The Financial Call. We are financial advisors on a mission to guide you through the financial planning everyone should have, whether you're doing it yourself or working with a financial advisor. These episodes will help you break down complicated financial topics into practical, actionable steps. Our mission is to guide motivated people to become financially successful. Welcome everybody. This is The Financial Call. I'm here with Laura. It has been a while. You guys won't know that because these are being published on a really set schedule, but we tend to record two or three or four in one week. And then take a break because this is not our real job and it's hard to do this in between our real job and you know, markets have moved a fair amount today. It is October of 2022, so I don't know exactly when the schedule is that this will come out. We have a fantastic team behind us, Caitlin, Shannon, Jackie. Trying to think if anybody else is in there, but those are the three main team members that help. And then we have 

[00:01:00] third party groups that help like edit the audio quality. Anyway, you guys don't need to know all this, but the point is there are a lot of people involved and we're excited to be back here recording a few. We are in the middle of the investing section of the Guided Path, so this is a Guided Path episode. It's season three episode. This is all about bonds. So the last episodes should have been about the basics on investing. That's three, one, and then stocks season three, episode two. Now bonds three, three. And we'll move on now once you have the basics, stocks and bonds, we'll move on to funds in episode four, Real Estate in five, and then more complex investments like options, futures, and private markets in episode six. And then how do you build an overall portfolio in episode seven? So we. We have a lot, Like we said earlier, I'm excited about this season. I think this is what people are wanting. It's, it's what people usually ask for first when they're like, Teach me about investing. 

[00:02:00] That's usually what they wanna know, and it's so applicable to everybody. Everybody needs to know this, and we'll have a couple of our other advisors on these next episodes. I think we have Tim joining us next time. And Tyson, they're great as well, so we're excited. Should be good. We have quite a bit to go over with bonds. Bonds are tricky because they're not super exciting. But they are vital for many people, and there are some young people that probably don't need any bonds right now in their life, but as you get older, you're going to want some bonds because of the stability that they could provide. Now, the tricky part is here in October of 2022, the normal behavior of bonds has been broken, right? Yeah. They've come down a lot. The aggregate bond index, which is a measurement kind of like the s and p 500. Has come down over 10%, which is not normal for bonds. I was gonna say, this is the first time that stocks and bonds have been down over 10% together. Same time. Right? Together. Yes, exactly. So long term treasuries, so that, we'll talk about that. But those are basiCally bonds issued

[00:03:00] by the government that are really long term in nature. In 20 and 30 years, those are down about 30%. So it's definitely a unique environment for, for bonds in general. So we'll talk. The benefits, the pros and the cons of bonds, and I think we just dive right in. Can you think of anything else in terms of housekeeping, Lara, before we do this? No, I don't think so. I think we just explain what a bond is. I think everyone's heard the term bond. You know, stocks and bonds. We talked about stocks last time. You're basiCally. Buying into the business. You pay for a stock to buy a stock, and then you have a partnership. You know, in the company you have some ownership in the company. A bond is not the same. Instead of buying in and owning a piece of the company, you're actually just lending the company some money and they pay you interest to do that, and then at the end of a certain amount of time, they'll pay your money back. It's like a loan that someone would get for a home or for a car. It's just vice versa. You're lending money to that company. People don't think of

[00:04:00] it that way though. They think I bought a bond. They don't realize that they lent a company or a government or some issuer money that they actually lent their money out. Yeah, it's kind of interesting. Yeah, so it's, the idea is you want, you want cash flow instead of growth. If you're buying a stock, you're going in it for growth. You're hoping that that business makes more money in the future, and that you participate in the upward movement of the stock price and maybe get some dividends along the way. So there's a little bit of an income component with dividends in stocks, but you flip it on its head here, you're looking for. The income stream with a bond, because typiCally if everything goes well at the end of maturity of that bond, you just get your own money back. There's not really a as much of a growth component. And by the way, we're talking in very general terms. If you are really into bonds, you might be listening and saying, Well, what about bonds with a warrant to equity? And yes, there are exceptions here, but bear with us. We're, we're trying to make this as accessible to normal, like all of us normal people. So we wanna make sure 

[00:05:00] that everybody knows what's going on here. So one of the benefits of bonds is typiCally less volatility and the predictability of income and repayment. That's the second benefit. We talked about cash flow being a primary focus versus growth. So if you're needing more cash flow, this is why more retirees end up owning bonds or people as they approach retirement is because of that cash. I would argue though that bond ownership in portfolios is more about volatility management than it is about in the The cash flows. Yeah. Yeah, I agree. If we were to rewind back into the eighties, those of you who are older listening, by the way, we don't get great stats on who's listening to the podcast. I wish that the system did, but we do know that many of you are older, and so that's great. I mean, I'm just saying older meaning wiser, meaning closer to retire. Is what I mean by that. So anyway, if that's you, if you were alive and thinking about interest rates back in the eighties, many of you may have purchased a home in the eighties and 

[00:06:00] double digit interest rates at that time. You could also get really great bond payouts. So your parents. And it could be your grandparents, depending on your age, could have purchased just bonds, taken the coupons, and they actually say clip the coupons, because you used to have to actually pull off a little coupon off of your bond. Oh, really? Yeah. So then I wasn't around for this, I just know this from reading, but basiCally they had this bond and you clipped it. You actually. Cut off a, Was the bond like a piece of paper? Like a certificate. Certificate. Okay. And that's why they Call it a coupon rate is because the bond had a coupon and we know all these terms, but we just take 'em for what they are. Right. And just and accept it. But you would clip the coupon and that would be how you would get your interest payment. And you take it to. The bank, and I have no idea. No idea. We're not sure I wasn't a round bar, but I have no idea. But that's, I do know that's the extent of the experience and where the terminology comes from, clipping the coupons. So anyway, your parents or your grandparents may have been able to just buy a

[00:07:00] bond at 12% interest rate. Clip the coupons is what they would've said, and then live off of that interest. I mean, it put a hundred thousand dollars in, get 12% interest a year, that's a thousand dollars a month payment. And then at the end of whatever period, maybe that was a five year bond, then you would just get your money back and then buy a new one and keep clipping coupons and keep making income and interest rates have dropped dramatiCally over, over the last 10 years. All of a sudden you try to buy a five year bond, and there were periods of time in the last two to five years that your five year bond may have paid you a quarter of a percent, half a percent, maybe, maybe 1% for the really, really safe bonds. So it just did not work, which is why. Retirees and most people as they take income from their portfolio, have resorted to other things. Okay, so let's move forward. But another benefit with bonds that is, is if a company goes bankrupt, bonds get paid out first. So if, if there's any, like let's

[00:08:00] say there's a business that has real estate or. Other assets of value inventory and things they can sell off if they start to sell off everything they can and they pay off their, their various debts. Stock owners are very last, very last bond owners are in line before stock owners. So if you have a bond, you may get some money back, whereas the stock owners are, are less likely to get anything back. Okay. So that's the reason people buy bonds. It's for less volatility. Income and that cash flow and building out some predictability in all of that, and then being a little bit higher in the pecking order in bankruptcy. Yeah, I don't think very many people think about that though. Usually you're, you're buying bonds with such a low probability of bankruptcy that the pecking order in terms of getting paid out first is usually not an issue unless you're looking at high risk bonds, which we'll talk about here in a minute. Anything else you would add to 

[00:09:00] like why people buy. No, I don't think so. And just to clarify, I don't know if we mentioned the coupon, is the interest rate that it's paying out? Oh yeah, good point. Just clarify on that. Okay, So like, so yeah, so if you had a bond and it, they Call it a 5% coupon rate, it's a 5% interest rate over the course of a year, and most bonds are paying out every six months. So you get that payment, half of it twice a year. Good point. Okay. So. Types of bonds. This is where in order to understand what risks you're taking with your bond ownership or even to diversify in stocks, I feel like it's a little easier for most people to understand. You're looking at it like, is it a healthcare company or is it a financial company? Completely different, right? Is it a small company or a large company? Is. International or domestic. We talked about some of this segmentation last time. Bonds have a similar way of segmenting, Well, let me say this differently. Bonds have a way of segmenting. It's not that similar. It's not, We're similar. Yeah. It's not that 

[00:10:00] similar to stocks, typiCally the first way of segmenting is by term. So short term, intermediate term, long term, and that's a little bit fuzzy. The lines between those three categories can be blurred. I would personally say short term is three years, and under intermediate term, maybe three right now, three to eight, three to 10 years at most. And then at least for us, we think of anything long term as 10 and up. I know some people might say intermediate. Three to 12 or 15. But just to give some context, bonds with a longer term have a higher risk because think about this for a second. Let's say you buy a bond that is a 30 year bond at 3%, you're basiCally saying like, I will be satisfied with a 3%. Interest payment for 30 years. Well, that's a long time to commit to anything, right? What if interest rates go up back up to 

[00:11:00] 17% or 15% or 12%? You're gonna be really kicking yourself for being stuck when you're stuck with that bond that's only paying you 3%. You got it? So that that volatility is really wide. The longer term. Now, let's say you buy that 3% bond and it's a one year bond and interest rates go up, you don't really. because you have the freedom to reinvest in one year. So the interest rate risk on that bond is less, but it introduces another risk, which is Called reinvestment risk. So let's say. Let's say you buy a bond at, let's go the other way. Let's say you have a 7% bond and it matures in three years, so it's a pretty shorter, you know, short to intermediate term bond. And you, that's a pretty good rate. 7% would be fantastic right now, right? Well, at some point you will have to reinvest that money. They Call that reinvestment risk, and that is exactly three years from now. The

[00:12:00] question is what will be the interest rates in three years? If, let's say you're able to get that at 7% now, but in the future you could only buy a 2% bond for another three years, there's your reinvestment risk. So there's a balance between interest rate risk if you go too long, and reinvestment risk if you go too short, and the good rates you had at the moment are no longer available for you. So that's, that's the tricky part, but that's how they segment it. Short term, intermediate. And long term, and that's why a lot of times we will have a mix of different term bonds. So we'll have some short term, some intermediate term, some long term. I feel like that's the way of diversifying with bonds. Totally. They Call that a bond ladder, folks, so you'll hear that. When you're talking either with financial professionals or on the news, sometimes pretty rare cuz bonds aren't that exciting. So the news channels don't pick up on . The bond market's bigger than the stock market in dollars and number of investments out there. So people don't realize this, but it's huge. Anyway. So then if we go to the

[00:13:00] terms and say, All right, let's buy a bond every year between years three and 12, each year they Call a one of the rungs of the ladder. And as they mature, then you get to buy at the tail end. And if rates are climbing, which has been the concern for the last decade, that rates would pop back up like they have in the last six months. So most people have been really concerned about that, if that's the case. And as long as you have bonds that are maturing each year, you are able to take advantage of. That reinvestment of the matured bonds at higher rates at the tail end of your ladder. So that's a great way to help build out a diversified approach of, you know, diversifying away that reinvestment risk. Yeah. The other way that they will classify bonds is terms of their. Quality. So what's the quality of the company that you're lending money to? I always think about this as the company's credit score. How good is their credit score? If it's higher than your interest rate's probably gonna be lower cuz they're more trustworthy, likely to pay you back that bond. If 

[00:14:00] they have a bad credit score, then same thing, they're probably gonna have a higher coupon, a higher interest rate. So we Call those high yield bonds. Those bonds that maybe have a lower. Credit score quality, a lot of times they'll pay out more. Or we have investment grade, which is usually higher quality, higher credit score rating. Companies very likely to pay you back. Probably gonna have a lower interest rate. I think these terms are terrible, by the way. Yeah. Investment grade like that doesn't really, That doesn't explain anything, doesn't it? I guess it means it's of enough quality that you could invest in it, I guess is what what it's saying, but, But investment grade means triple B and up Triple B. Single A, double A, triple A, that's working your way up from triple B, and then high yield is double B and down. The other term that's not quite as friendly for high yield is junk bonds. I always feel bad. Do you? I do. And they say junk bonds. Yeah. Maybe they don't care, but it's the consumer that stresses about it. That's what I would think. I would think someone would say junk 

[00:15:00] bond like I'm never gonna buy that, but maybe they still so true. Right? Because high yield sounds so fantastic, like give me that high yield. I want that high. And high yield and junk bonds. Same thing folks. Same like they're exactly the same thing. Investment grade sounds great, but it's almost like you could Call those low yield bonds too. Yeah, right. Because they typiCally yield less moodies and standard and pores. Are two of the main issuers of indexes, like you hear about the s and p 500. That's from standard and pores, but they are, they are the rating agencies that, that provide those ratings. Now, you should not rely, if you're buying individual bonds, you should not rely on Moody's and, and standard and pores ratings. Like you can't just say, I'll buy anything that the standard and poor says is triple. because you may be buying something that that s and p says is triple B, but in reality it's probably single B because they may not have looked at it in the same way that an analyst would in more detail. Anyway, hopefully that gives you an idea. 

[00:16:00] Issuers, that's next. This changes things quite a bit. It can change your taxes too, which we'll talk about in a second. But the issuer is the borrower. It's the entity. So instead of a person, it's a thing, right? It's the entity that is borrowing your. So corporations borrow your money through bonds. Governments borrow your money, municipalities borrow your money, and agencies borrow your money. Now those last three are all pretty related and confusing. Think when you hear governments think like the US government, the federal government, and when you think of municipalities, think of like cities, maybe states. Then when you think about agencies, that's like the Fannie Mae, Freddie Mac, all of the agencies the government has created to help with either like student loans or. Home lending, like very, very specific agencies with a specific purpose. And in some cases the government 

[00:17:00] actually backs those, so that backing can create a little bit higher, higher rating as well. Corporations are the most different here than the other three because they're, they're not related to the government when it comes to issuers. They all have various risks, so you could have really risky corporations and really safe or more safe corporations. And the federal government is just basiCally, Pretty secure. I did a webinar yesterday and I can't remember what we talked about so far today and yesterday, what we talked about yesterday, , But the government is considered the lowest risk because they can just tax their way out of a problem. If they're having a hard time making payments, they can just tax their way to, or they can flood the market with money, and therefore those payments are a whole lot easier to make because they printed money, you know? There are multiple ways that the government can make good on their payments. Municipalities and agencies don't have that same freedom, and corporations for sure don't have that same freedom. But anyway, there are good and bad municipalities. There are some municipalities that could go bankrupt. And you have to be aware of 

[00:18:00] that as well. What else before we move on to taxes? Laura, can you think of anything else between, So those were the three main ways that the bond market is segmented and that I, we think an investor should understand, which is the length of the bond. They Call that term, the credit rating of the bond, which they Call that. Quality and then the borrower, which is issuers. So term quality issuer. I think that's pretty clear. One thing maybe to clarify, you said that people shouldn't trust just the moodies and the s and p. What would you recommend or the standards in poor would you say? Check out multiple? What would you recommend there? Yeah, so this is bond market investing is hard because it's complex, so not only do you have to get issuers that are likely to pay your money back, you also need to factor in interest rate change. And you need to be able to price the value of that bond and then compare it with what the market is pricing it at. So these bonds are not just sitting perfectly level. They either have a little bit of

[00:19:00] a premium or discount, meaning they're a little bit above or below what you'll get at at maturity. And so you ask like, how do you make those decisions? Yeah, you could look at Moody's and you could look at standard pores, but at that point, this is why usually professional managers get involved and in interestingly enough, most of the time, a professional bond manager. Not that they're clueless about stocks, but they are very unaware of like the fundamentals and decision making of stock managers. And stock managers are pretty unaware or unable to, to assess bond portfolios very well. It's very specialized skill. I do know some individuals that will look at the ratings. And then they will also start to get comfortable with pricing metrics and, and then buy them on their own. Okay. So you're just saying don't just rely on the rating before you buy the bond. You need to look at other things, how its price compares to other bonds that are paying the same rate, that sort of thing. Yeah, that's exactly right. So you probably need to look at a two or three things.

[00:20:00] One, How expensive is the bond relative to, like you said, other issuers paying a similar amount? And that will tell you a lot about what the market thinks about that bond. They think either that it's higher quality or lower quality on average than the market, depending on its price. Two, What you think interest rates will do in the future? Then three, if you actually go to buy it, there's not as much volume sometimes on these bonds. Like you could buy Apple stock anytime you want. There is such high volume that within a fraction of a second your order's going to go through a bond could be completely different. There may not be a buyer interested in that particular bond at that date with that issuer. And so there could be a spread where you actually give up a lot in buying and selling in the transaction. So there's that liquidity risk. Yeah. Yes. So those are the three main things that someone should be looking at. I've had our bond desk, I've had a client request money when we own individual bonds in a portfolio and our bond desk come back to me and say, How urgent is this withdrawal need? 

[00:21:00] Because, Today because of these factors and end of day, and most of the bond traders are gone for the day. And they, they went through all these factors and said, We think this client's gonna pay about 10 to $20,000 in a spread cost to get this bond sold. And, and I knew the client and I, I already kind of knew what he was gonna say, but I Called him to make sure and he said, he said, Oh, no, no, no, no, no. I don't need the money that fast. Yeah. But he was basiCally giving up say, I'm gonna sell it for cheaper just to. Sold. Now, you know, if someone's moving across the country and they need their stuff gone, they're gonna sell it for cheaper, most likely. Got it. Exactly. Same scenario. So he would've been paying for urgency. It was Friday afternoon, that's why. And he, they waited until Monday, I think, and sold, and it worked out great. So anyway, there's, there's a lot of different trading components with when you're looking at bonds as well. Okay. So moving on to taxes, taxes. Are very different with bonds because like for example, people get really excited about municipal bonds because governments can't tax 

[00:22:00] each other. So there are many municipal bonds that you receive interest and you do not have to pay federal taxes on it. And if you are within your state, oftentimes they'll give you a state tax benefit. And sometimes local, like if you get like local municipalities, you could have your, your local taxes avoided as well, so it could be tripled tax free. And then there are what they Call states of reciprocity. So like if there's a state. That has, like if we're in Utah, if you had a Utah municipal bond and if another state has the same rules, they actually have agreements within certain states. And I don't know exactly, I have to look this up and use our bond desk to help with this, but they have agreements where if it's tax free in this state, it'll be tax free for a resident of another state as well. And so you can buy some states, even if it's not your state, and still get your state tax, avoid. So people are probably listening saying, Well, Zacc, why wouldn't I just buy municipal bonds if I don't have 

[00:23:00] to pay taxes on it? Yeah, you were gonna answer it. Uh, you can add to it, but a lot of times the municipal bonds know this and they will pay a lower interest rate because they know it's tax free. So then you have to do the math and compare, Okay, if I'm getting this interest rate from a municipal bond and I'm not paying taxes, How does that compare to my corporate bond or my treasury bond that I do have to pay taxes on? You kind of have to run the numbers and see if your tax rate's really high. It might make sense. The municipal bond may pay you a greater net payout versus a corporate bond, but if your taxes are low enough, it might not make as much of a difference. Just take the higher interest rate and pay the taxes on it for sure. That's perfect. Or you know, if you're looking at inside an IRA and the muni bond is paying out 2% and the corporate bond is paying out, Well, inside an ira there's no tax anyway because it's all tax later when you take it out. So don't forfeit a percent of interest for, And we see this all the time because people get excited about it, they hear how great they are, and they're like, Great, I'm gonna put it in my 

[00:24:00] retirement account. I'm gonna get this amazing tax-free benefit. And it's like, well, your IRA already has that shelter of free until you withdraw. So be careful there as well. But that's absolutely right. Well done, Laura. So I think that's it on Taxe. There are a few nuanced differences around, we're gonna talk about premium and discount bonds, and then I'll come back and touch on one tax concept, but you have to understand discount bonds before we can do that. So let's talk about that. So an example, let's say that you have a bond. You own a bond at a 3% coupon rate. And markets change and the the new bond. So this is ABC company. We're making this up. ABC Corporation has borrowed money from Laura at 3% interest. Laura is getting a 3% coupon payment. She gets half of that every six months. And two years later, all of a sudden, ABC Corporation issues new bonds. But interest rates have 

[00:25:00] changed enough that the new ones are now issued at 5%. So now I'm thinking, well, I want bonds from abc. I could go out on what they Call the secondary market, which is where Laura's bond is, and I could buy Laura's bond from her. Or I could go out and buy another one. Maybe somebody else lent that 5% interest bond. So they bought that bond. I've got a choice here. I've got this other, other trader over here has a 5% one. Laura has a 3% one. So all things being equal, I'm buying the 5% one, right? So in order to equalize those, Laura May have a thousand dollars in this bond, but I might meaning it will mature at a thousand. They'll pay me back a thousand dollars at the end of the period. Yeah, thank you. And other investor over here gets a thousand dollars back at the end of the period with a 5%. So the purchase price right now might be a thousand dollars on the 5% bond, but Laura needs to discount her price to get me interested in it.

[00:26:00] So that's the word discount. So Laura's bond will trade at a discount in order to equalize the supply and demand of those bonds from abc. So I could say here, Zacc, you take my bond for $800, it's gonna pay you 3% for the rest of the period, and then at the end of the period you are gonna get a thousand dollars back. Yeah. So I made $200 on the growth between the discount and the maturity, or I can buy the other one at five. Pay a thousand and get a thousand back. So it's, it now all of a sudden has been equalized. It's a little bit different though, right? Because on one bond I get the, the 5%. Now let's say I get the same cash no matter what. Like if we sum up the $200 and the difference of the interest rates, By the end of maturity, let's say that it is exactly the same amount of money. Well, in one scenario, I get that money at the very end, your scenario, right, where I get most of it at the end, the other scenario, it's spread out over the whole bond so that that changes the cash flow a 

[00:27:00] little bit for the investor, right? It also changes the taxes a little bit. The idea is that the government knows this and they don't want you to just be able to benefit from all go buy bonds at a discount and then take a long-term capitall gain on the $200, cuz the long-term capital gain is cheaper tax rate than the income rates. So they actually make you account for a little bit of that discount each year as income to you. So they're trying to normalize the two bonds for taxes as well. Now, a premium, let's say Laura's bond at 3%. Is great because interest rates have gone down and ABC company is now issuing bonds at 1%. Well, I could go buy the 1% bond off random investor, or I can buy Laura's bond at 3%. At this point, Laura is like, I am not selling you my bond for a thousand dollars, cuz I know that all you can get is 1% out there for a thousand dollars. So Laura bumps her price up to maybe $1,100 or $1,200. So, It's weird. It feels weird because 

[00:28:00] I'm going to buy your bond for $1,200 and then it's going to mature for a thousand. I'm losing $200, but I'm getting a higher interest rate all along anyway, So different ways of looking at premium and discount and don't think of premium and paying that premium as bad because in some cases it's actually providing me a lot more cash flow, like if I have to wait at 1% interest over that whole time. That makes me wait quite a long time to get my money back. So there could be techniCally less risk in a premium bond because if interest rates go up, I got more of my money back quicker and I can reinvest it at higher interest rates quicker. And that's why there's the inverse relationship between. Interest rates and bond prices, you've, maybe some people have heard that as interest rates go up, a lot of times bond prices will go down and vice versa. Yeah. And all that is, is the premium or the discount being factored in to the fact that your bond is at a different coupon rate than what the new bonds or new market prices are

[00:29:00] dictating. Okay, so that's coupon. And let's talk about coupon versus yield. Now, if you understand premiums and discounts, you understand coupons versus yield. Coupon is what you get in payments from the issuer. Yield includes that, plus the effect of your premium or discount. So if I bought the bond for $800 from lara, I'm actually getting more than 3% because I'm, I will mature with the extra $200. So my total yield might be 5%, it might be closer because to a higher number, because I'm getting the growth of that discount plus the coupon that's total yield. Some bonds have the ability where the issuer can say, at certain times, we're done. We just wanna pay this thing off. That is a term Called cull. The bond may be cullable, and so they have different yields out there. Like yield to maturity means how much money you would make overall till the end, or yield to worst means if it's cullable. If 

[00:30:00] the worst thing happens to you and they Call it what would be the yield over that period of time. And so depending on your situation, if you, if you bought a bond at a premium, it might be a, you might not love it if they Call it really quick, cuz you'd experience all that drop into the par value pretty fast. What else, Laura, you think, Is there anything else we need to cover on bonds? No, I think that's helpful. Just remember the yield does take into account the discount or the premiums, so probably a better thing to compare is the yield on bonds versus for sure, you know, just looking at the coupons, Oh, you'll be whipsawed. If you look at just the coupons, you'll be looking, Oh, I'm gonna buy the 7% coupon. Right? Or no, that 1% looks terrible, When in fact the 1% might be better because of the discount versus the premium. Be aware of that. I feel like we just talked the basics of bonds. Bonds are so complicated. There's a ton to them, but I feel like that's helpful to understand the basics of how a bond works. It's a loan to a company. They pay you a coupon to lend the money. They'll give you the money at the end. So

[00:31:00] they're great. They're an important part of your portfolio. Anything else? I think that's a good summary. They have a credit score, they. Tax consequences one way or the other. They can trade all throughout the day on trading days and then understanding the difference between coupon and yield and you got it. So we will use this knowledge that you have to help you understand funds and the difference between buying an individual bond or buying a fund of bonds. And we'll talk about this when we talk at the very last episode of the season with Portfolio Construction. To be honest with you, if you understood. 20 to 50% of what we covered today, and maybe you listen to this episode again, and then you understand 60%, you are ahead of 90 plus, 95, maybe higher percent of people out there who actually own you. Take all the owners of bonds and if you understand what we talked about for the last 30 minutes, You're ahead of, I would say more than 95% of the people that own bonds. Congratulations. Well done Okay. Thanks very 

[00:32:00] much. This podcast is intended for informational purpose only and is not a substitute for personal advice from Capita. This is not a recommendation offer or solicitation to buy or sell any security. Past performance is not indicative. Or for a future results, there can be no assurance that investment objectives will be achieved. Different types of investments involve varying degrees of risk, including the loss of money invested. Therefore, it should not be assumed that future performance of any. Specific investment or investment strategy, including the investments or investment strategies recommended or proposed by Capita will be profitable. Further Capita 

[00:33:00] does not pro by legal or. Tax advice. Please consult with your legal or tax professional for advice prior to implementing any strategies discussed during this podcast, certain of the information discussed during this podcast. Is based upon forward looking statements, information and opinions, including descriptions of anti anticipated market changes and expectations of future activity, capital beliefs that such statements, information and opinions are based upon reasonable estimate eight and assumptions. Forward looking statements, information and opinion are inherently uncertain and actual events or results may differ materially 

[00:34:00] from those reflected in the forward looking statements. Therefore, Under reliance should not be placed on such forward looking statements, information and I opinions. Opinions. Registration with the c S E does not imply a certain level of skill or training.

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