I will attempt to post an article describing "Convertible Debentures. If succesful, I hope it helps.
Brian
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Last updated at 11:24 PM on 29/07/07 |
Get the best of both worlds with convertible debentures 
JODIE MATTIE
The Truro Daily News
When investors are first approached with the idea of investing in convertible debentures, they often get the feeling that they’re “too good to be true.” Convertible debentures are hybrid securities that combine fixed income yields with potential stock market participation. Suitable in many market climates, they are an appropriate investment for long-term investors seeking higher rates of total return but with reduced risk. Like a bond, convertibles generally guarantee a specified interest payment and a par value, usually $1,000, at maturity.
The one important feature that differentiates convertibles from traditional bonds is that the holder has the option to convert the bonds into equities for a predetermined number of shares during a specified period of time at their prerogative. The basic attraction of a convertible lies in its ability to pay interest, while benefiting from the capital appreciation of the underlying stock.
Successful investing requires a continual search for ways to control risk and protect assets, while attempting to achieve above-average returns. By including convertibles in your portfolio, you can increase the return per unit of risk while further diversifying your holdings.
Investing in convertible bonds can offer numerous advantages over investing in common stock. Holders of a convertible bond have a greater claim on the firm’s assets in the event of insolvency. As well, convertible bonds offer protection in bear markets through their bond features and participation in capital appreciation in bull markets through their conversion option. Convertibles are particularly attractive as an alternative to straight bonds because of their conversion feature. By choosing convertibles over straight bonds, investors have the opportunity to generate higher returns and potentially provide themselves with some protection against interest rate risk. If straight bond yields are low, convertibles can be used to increase total return through the incremental returns generated by their equity participation. Investors should understand that they do pay a price to participate in the equity fluctuations. Convertibles are a riskier alternative to bonds and are usually subordinate to other bonds in the capital structure.
Investors should also keep in mind that the credit quality of convertibles relative to straight bonds can be difficult to judge as convertible issuers rarely pay the cost of having their bonds evaluated by leading bond-rating services.
Before including convertible debentures in your investment strategy you should consult with an investment professional to ensure they are suitable to your overall objectives.
Jody Mattie is an investment advisor
with CIBC Wood Gundy in Truro. |
30/07/07
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NEWS FROM : Iranian women’s rights activist barred from travel to Sweden to accept prize
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Last updated at 11:24 PM on 29/07/07 |
Get the best of both worlds with convertible debentures
JODIE MATTIE
The Truro Daily News
When investors are first approached with the idea of investing in convertible debentures, they often get the feeling that they’re “too good to be true.” Convertible debentures are hybrid securities that combine fixed income yields with potential stock market participation. Suitable in many market climates, they are an appropriate investment for long-term investors seeking higher rates of total return but with reduced risk. Like a bond, convertibles generally guarantee a specified interest payment and a par value, usually $1,000, at maturity.
The one important feature that differentiates convertibles from traditional bonds is that the holder has the option to convert the bonds into equities for a predetermined number of shares during a specified period of time at their prerogative. The basic attraction of a convertible lies in its ability to pay interest, while benefiting from the capital appreciation of the underlying stock.
Successful investing requires a continual search for ways to control risk and protect assets, while attempting to achieve above-average returns. By including convertibles in your portfolio, you can increase the return per unit of risk while further diversifying your holdings.
Investing in convertible bonds can offer numerous advantages over investing in common stock. Holders of a convertible bond have a greater claim on the firm’s assets in the event of insolvency. As well, convertible bonds offer protection in bear markets through their bond features and participation in capital appreciation in bull markets through their conversion option. Convertibles are particularly attractive as an alternative to straight bonds because of their conversion feature. By choosing convertibles over straight bonds, investors have the opportunity to generate higher returns and potentially provide themselves with some protection against interest rate risk. If straight bond yields are low, convertibles can be used to increase total return through the incremental returns generated by their equity participation. Investors should understand that they do pay a price to participate in the equity fluctuations. Convertibles are a riskier alternative to bonds and are usually subordinate to other bonds in the capital structure.
Investors should also keep in mind that the credit quality of convertibles relative to straight bonds can be difficult to judge as convertible issuers rarely pay the cost of having their bonds evaluated by leading bond-rating services.
Before including convertible debentures in your investment strategy you should consult with an investment professional to ensure they are suitable to your overall objectives.
Jody Mattie is an investment advisor
with CIBC Wood Gundy in Truro. |
30/07/07
|
Comments:
|
| This Conversation is Semi-Moderated. What is moderation? |
| What does moderation mean? |
|
The Truro Daily News is committed to encouraging intelligent discourse among our readers and to creating a forum where diverse views and opinions on a wide range of topics can be aired. The forum you are in now is a result of our continuing efforts to facilitate a dynamic online conversation among our readers.
This is a semi-moderated or reactively moderated conversation. Once a reader follows the steps to register and submit his or her comment it goes directly to the website. A comment may be edited or deleted for reasons of content or language.
All readers wishing to join a conversation must first sign in and agree to the Terms of Usage, which explain the rules of acceptable content. |
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- there are currently no comments for this story -
| Recent Jodie Mattie columns : |
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