If a company is not doing too well you may not get a dividend at all that year. Back to list of questions 17. A bond is simply an IOU issued by a company. Instead of buying a share you can lend a company money and get a bond. Interest rates and the duration of loans both vary, but within a bond the interest rate remains fixed.
Bonds are tradable just like shares and can be very profitable.
Let's say you lend Ford 1,000 and they say they will pay you back in 3 years, and give you 200 extra. Now, if general interest rates fall after you have bought a bond, that rate of interest is going to seem attractive. So other people might want to buy your bond to get that money at the end of the bond term. Back to list of questions 18. It is said as a warning and of course it is true.