WHAT IS AN INVESTMENT GRADE? Straight to the Point

Описание: In around two minutes you will know what is an Investment Grade. You will get both professional definition and easy explanation. No intro, no outro, straight to the point.

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Investment Grade is a rating of a debt security that presents a very low risk of default.

And if you are not sure what a rating means, feel free to watch my previous video.

Every debt security as well as company that issued it is assigned to a rating.

Long story short, a rating shows the likelihood of a company or municipal to repay its debt.

The higher the rating, the more likely your money will be safely invested.

But higher rating usually means lower returns.

And Investment Grade type of bonds are those bonds which have very high ratings.

For example, Standard and Poor’s uses letters to assign bond ratings. Triple A rating means the highest quality, while triple C means that a bond has very high chances of default.

Bonds with rating of triple B and above are of an Investment Grade.

Meaning that only those bonds with ratings of AAA, AA, A, and BBB are considered to be of a high safety.

Investment Grade bonds are the opposite to junk bonds. And if you want to know what junk bonds mean as well, feel free to watch my next video.

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