Introduction to Bond Indicators

Bonds generally provide a high degree of safety with regularly scheduled interest payments over the life of the bonds. But bonds do fluctuate in value, usually because of changes in interest rates. Because you can sell or swap your bonds, you will want to know the value of your bond at any given point in time.

While no one can consistently accurately predict the future, it is possible to recognize certain trends in financial markets that serve as "indicators" of potential market performance. This is also true of the bond market. A savvy investor pays heed to economic indicators to help make educated guesses as to the future trends in his or her investments. Bond quotes, ratings by bond credit rating organizations, as well as economic indicators can provide valuable information to a bond investor. Such information helps the bond investor make wise investment decisions regarding buying or selling their bond holdings.