| Editor's Note: After President Donald Trump latest tariff announcement roiled markets, some investors may be wondering what's next. Which is why in today's guest article, Oxford Club Chief Income Strategist Marc Lichtenfeld is revealing a way for traders to weather this current storm. While it may not necessarily reflect our own views at Monument Traders Alliance, we believe in giving readers as many options as possible so they can choose what's best for them. Marc also revealed a way to lock in a contractually obligated 200% return over the next four years. Click here to learn more. - Ryan Fitzwater, Publisher
Marc Lichtenfeld, Chief Income Strategist, The Oxford Club Today, I want to discuss something that market analysts don't talk about too often. Bonds. Before your eyes glaze over, this is important. Bonds belong in everyone's portfolio. Now, I'm not talking about bond mutual funds or exchange-traded funds. I'm talking about individual bonds. First of all, what exactly is a bond? It's pretty simple. A bond is a loan that you make to a company or government agency. If we're talking corporate bonds, then you're loaning money to a company for a specific amount of time at a specific interest rate. Bonds are typically sold in $1,000 increments, and they always have a maturity date and a coupon. (The coupon is simply the bond's annual interest rate.) For example, let's say there's a bond that has a 5% coupon and a maturity date of February 1, 2030. If you decide to purchase the bond - meaning you're lending $1,000 to the underlying company until February 1, 2030 - you will receive 5% per year in interest, which is usually paid in two installments each year. And on February 1, 2030, you'll get the $1,000 back. Now, here's the key: If you buy or sell a bond in the market, it may not trade for $1,000. When it is first issued by the company, it will. But as soon as it starts trading, the price will vary. So you could buy the bond for $900. In that case, you'll receive more than 5% per year, because the 5% coupon is based on the $1,000 figure. No matter where the bond is trading, the bond will pay $50 per year in interest. So if you pay $900 for the bond, you'll make 5.6% interest ($50 divided by $900 equals 5.6%). If you pay $1,050 for the bond, you'll make 4.8% ($50 divided by $1,050 equals 4.8%). Here's another important feature: At maturity, a bond pays $1,000, regardless of what you paid for it. It's obvious why you might buy a bond for $900 when you know you'll get $1,000 at maturity, but you may be asking why someone would pay more than $1,000 for a bond if they know they'll lose money at maturity. It's because even with the loss, they may still make more than they would in other places. | 
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