Don Steinmann's Investment Tip of the Week

Don Steinmann's
Investment Tip of the Week

YTW

When looking at bonds, there are many ways to calculate the yield. This differs because the price of a bond fluctuates over time. There is a difference between the current yield and the yield to maturity for example, if the bond’s price has changed since it was issued. But the most important yield is the Yield to Worst. That’s the lowest yield you can get on the bond if it’s held to maturity, or to call, or whatever works out to be the lowest yield. Sometimes that number can be hard to find. So whenever you’re looking at a bond, always ask the broker what the yield to worst is. You might do better, but as long as the bond doesn’t default, that’s the lowest yield you’ll get.

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