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For bond investors, it's all about yield; how to find it
USA Today - March 8, 2010 - by Matt Krantz
Q: Is there a good way to compare the yields being paid on different government securities, such as two-year and 10-year Treasuries?
A: Nearly all investors care mostly about two things: price and yield.
Stock investors are focused on price, because price appreciation is where they get the lion's share of their total return. Bond investors concentrate on yield, as that's where most of their return comes from.
What's a bond yield? Bonds make cash payments of a predetermined amount and frequency. The yield tells you how large those payments are in relation to the amount of money you invested to buy the bond. The yield is a critical piece of information to understand how much return you're getting in exchange for lending your money.
In your question you expressed frustration that many websites with bond information present the price of bonds, but not the yield. The price of a bond is critical, too, but it can be confusing for investors who want to understand what their return is.
There are a couple of websites you might want to check out. Your first stop should be the recently revamped bond center at USATODAY.com's Money section. Here you'll see not only the yields on two and 10-year Treasuries, but you can see what they were a month ago and a year ago. This site strips away most of the confusing details about bonds you may not need.
Bloomberg is another helpful source for bond yields. Its site lists maturity dates, prices and yields here. Bloomberg also provides data on the 30-year Treasury bond.
Matt Krantz is a financial markets reporter at USA TODAY and author of Investing Online for Dummies and Fundamental Analysis for Dummies. He answers a different reader question every weekday in his Ask Matt column at money.usatoday.com. To submit a question, e-mail Matt at mkrantz@usatoday.com. Click here to see previous Ask Matt columns. Follow Matt on Twitter at: twitter.com/mattkrantz
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